AM BestTV: Commercial Automobile Writers Hampered by Medical Costs, Loss Trends, Says AM Best Associate Director
In this AMBestTV episode, David Blades, associate director, AM
Best, said large gaps in performance are emerging among U.S.
commercial automobile writers, limiting some insurers’ ability to
respond to market pressures. Click on www.ambest.com/v.asp?v=commercialauto519
to view the entire program.
For 2019, AM Best is maintaining a negative market segment outlook on
the commercial automobile segment. Blades addressed some of the reasons
for the negative outlook.
“Inadequate rates in conjunction with adverse prior loss reserve
development have been two big keys that have continually plagued the
marketplace and have definitely caused poor results,” said Blades.
“Additionally, medical cost inflation from diagnoses, medications,
surgeries and the higher cost of automobile repairs, all associated with
accidents have increased the loss severity.”
Blades also spoke about what changes would cause AM Best to consider
revising its negative outlook on the segment.
“There would have to be underwriting and pricing changes, along with
risk selection,” said Blades. “Changes in things that are impacting
claim costs and expenses. Having all those factors come together and
actually start having some impact on the bottom line. Also, adverse
losses or prior year losses moving in a more positive direction. These
are the things that would factor into AM Best considering a change in
its overall outlook.”
To access a copy of this market segment report, titled, “U.S. Commercial
Automobile Results Continue to Deteriorate,” visit www3.ambest.com/bestweek/purchase.asp?record_code=284139.
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