A $2.2 billion underwriting loss in 2025 certainly isn’t anything to celebrate, but when it comes to U.S. commercial auto insurers, there may be a reason to crack a smile.
According to a new report from AM Best, the loss was a 55% improvement compared with the prior year. Any improvement is welcomed for a line that has performed worse than any other commercial insurance line of business over the last decade. Net premiums written increases 6% year-over-year, and incurred losses were basically flat.
Together, U.S. commercial auto insurers have booked a loss in underwriting each year since 2015. Some of its best years during this time were during the COVID pandemic because fewer vehicles were on the road.
Commercial auto’s adverse reserve development in 2025 fell to its lowest level of the last 10 years, and there be some momentum as the direct loss ratio for commercial auto was 66.1 for the first half of 2026. The combined ratio improved to 96.6 in 2025 from 101.4 the prior year.
The physical damage component of losses in commercial auto recorded a $2.4 billion gain, as insureds “that have been more proactive with fleet monitoring and maintenance have benefited from a reduction in the frequency of preventable accidents, which has likely aided overall auto physical damage profitability,” explained David Blades, associate director of industry research at AM Best.
Not everything is looking up. On the liability side, the segment’s underwriting loss in 2025 was more than $4.6 billion – not good, but better than losses of $6.39 in 2024 and $5.9 in 2023. Still, liability accounts for 77% of commercial auto’s NPW, so it affects profit the most. Liability is impacted by adverse social and economic inflation trends on claims costs.
For buyers, improved financial results in commercial auto have brought some pricing relief. AM Best said increases during the second quarter 2026 were the lowest in more than 10 years.
Topics USA Trends Auto Commercial Lines Business Insurance AM Best
