Commercial auto insurer premiums up, but competition may erode gainsReprints
The commercial auto insurance industry reported improved underwriting results for 2014, but increased competition may lead to deteriorating results, according to a report released Wednesday by A.M. Best Co. Inc.
The segment reported a 98% accident year combined ratio for 2014 compared with a 99.5% combined ratio for 2013 and a 105.6% ratio for 2012, the Oldwick, New Jersey-based rating agency said in the report, “Commercial Auto — Uncertainty Remains”.
Net premiums written increased 7.3% over 2013 to $25.83 billion.
However, the report predicts increased competition.
“With the slow, uneven economic growth limiting the number of commercial insureds taking on additional exposure through expanding auto fleets, more competitive market conditions may well lead to an erosion of underwriting discipline as companies strive to write new accounts or retain existing business in order to sustain the recent pattern of premium growth,” says the report.
Travelers Cos. Inc. had the biggest market share among the top insurers, at 6.7% for 2014, which compares with its 7.3% market share in 2013, according to the report. The insurer reported $1.97 billion in direct premiums written in 2014, a 0.4% decrease from 2013.
The biggest increase in direct premiums written among the top insurers was reported by Berkshire Hathaway Inc., which posted a 74.7% increase in 2014 to $863.1 million. Its 2.9% market share for 2014, which compares with 2013 share of 1.8%, was the eighth-largest, according to the report.