It’s no secret that many U.S. commercial automobile insurers have been struggling to make a profit. Growth in direct premiums earned has failed to keep pace with growth in losses, and the impact on the aggregate commercial auto loss ratio was particularly evident during the 2009-12 period (see chart below).
Challenges compounded by claims frequency
These challenges have been compounded by increases in claims frequency as the economy continued to expand. In addition to putting more vehicles on the road, the rebounding economy has caused many businesses to make more intensive use of existing vehicles – an understandable action that, unfortunately, increases claims without increasing premiums.
Nevertheless, some insurers are writing commercial auto profitably. Our white paper, What Are Successful Commercial Auto Insurers Doing Right? explores how.
