OLDWICK, N.J.--(BUSINESS WIRE)--In this A.M.BestTV episode, David Blades, senior industry analyst, and Charlie Smentkowski, financial analyst, both at A.M. Best, discuss a new report on the U.S. commercial automobile segment, including how some writers are bolstering reserves to address prior pricing shortfalls. Click on http://www.ambest.com/v.asp?v=commercialauto218 to view the entire program.
The U.S. commercial automobile insurance sector continues to underperform compared with the property/casualty industry as a whole.
“There are a number of factors that are impacting the ability of commercial automobile insurers to generate profitable results over the last few years,” said Blades. “Rising loss costs, both medical costs and automobile repair costs, have distinctly impacted the ability of the insurers to make money in the last several years.”
Blades cited increasing loss frequency, distracted driving and inadequate initial loss estimates for claims as other factors that have impacted commercial automobile insurers. In addition, the need to add to prior years’ reserves in forthcoming years have also had an impact on current year underwriting results, according to Blades.
The recent report revealed an underwriting loss of approximately $2.9 billion in 2016, nearly quadrupling the level from just five years ago. However, Smentkowski says, “They are still profitable and well-capitalized, and A.M. Best has seen market share remain relatively the same year after year between 2015 and 2016 on both the direct and net written basis.”
To access a copy of this special report, titled, “Commercial Automobile Sector Struggling to Keep Pace,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=269762.
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