AM BestTV: Commercial Automobile Writers Hampered by Medical Costs, Loss Trends, Says AM Best Associate Director

2019 MAY 16 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- 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 http://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 http://www3.ambest.com/bestweek/purchase.asp?record_code=284139.

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