Menu

Reinsurance News

Further rate strengthening expected in U.S. commercial auto sector: JLT Re

5th February 2019 - Author: Luke Gallin

JLT Re (North America), a division of the reinsurance arm of global brokerage JLT Group, is anticipating further rate strengthening in the U.S. commercial auto sector in 2019 and through 2020.

JLT Re logoThe broker recently published its Commercial Auto Market Briefing, a new report which analyses both accident frequency and severity, corrective actions, one-year reserve development trends for auto-insurance, and which also takes a look to what the future might hold for the space.

Ultimately, JLT Re expects to see further rate strengthening in the sector in 2019 and through 2020, reflected in increased accident year profit margins for the top tier underwriters. Furthermore, JLT Re says that benefits from regulations and loss controls are also expected to be witnessed for the top tier players in 2019 and into the following year.

Mark Shumway, Global Head of Strategic Advisory, JLT Re, said: “Over the last ten years, even as a number of specialists have managed to earn underwriting profits in the segment, U.S. commercial auto has been difficult for multiline carriers. While serious problems remain, including inadequate accident year reserves and elevated claims frequency, remedial actions are now finally starting to prove sufficient for discerning carriers.

“It is important to note that, in aggregate, the commercial auto line will likely continue to pose challenges for the next several financial years, particularly as carriers recognize deficiencies in their accident year loss reserves.”

RMS

Executive Vice President (EVP) of JLT Re’s Transportation unit, JJ Johnson, added: “When we look back at the Commercial Auto Market as a whole and certainly preceding the shift in loss development in 2011 from favorable to unfavorable— we are bullish on certain carriers and producers that are specialized and diligent in their pricing and underwriting approach, as well as cognizant of their mix of business.

“It really is not a new thing; we have indices where specialized groupings have historical 10-year combined ratios below 95%, with the very best carriers regularly below 90%. There are certainly accretive innovations and regulations that will impact the industry; however, it will still always depend on how these shifts and changes are taken into account from an underwriting and pricing perspective. In short, there is no quick fix or silver bullet.”

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
The Hartford reveals new operating model for Navigators businesses

Property and casualty insurer The Hartford has announced a new operating model and organisational structure for its specialty commercial and...

Close