Economic, Social Inflation Influence Drop in Commercial Auto UW Profits: Triple-I/CAS
Article 0 Comments Commercial auto insurance has struggled to achieve underwriting profitability, even before inflationary conditions affected property/casualty lines in recent years. The trend has been accompanied by steady growth in net written premiums (NWP), according to the Insurance Information Institute (Triple-I), an affiliate of The Institutes. In its “Commercial Auto: Trends and Insights“, Triple-I indicates the declines in underwriting profitability, despite relatively steady growth in premiums written, have been driven by several causes including that vehicles have become increasingly expensive to repair. Litigation trends have also had an impact, the report noted. Excessive injury and fatalities contribute to increased attorney involvement leading to higher claim-related expenses due to larger settlements and protracted litigation. Nationally, commercial auto defense and cost containment (DCC) expenses – a key measure of the impact of litigation on insurers – has nearly tripled over the past decade, the report stated. A recent study “Increasing Inflation on Auto Liability Insurance – Impact as of Year-End 2023”, conducted by Triple-I and the Casualty Actuarial Society (CAS), found that between 2014 and 2023, increasing inflation drove auto liability losses and DCC up by a range of $118.9 billion to $137.2 billion, or 9.9 percent to 11.5 percent of...