AM BestTV: U.S. Non-Standard Auto Insurers See Improved Results, Face Obstacles, Say AM Best Analysts

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- In this episode of ^AMBestTV, David Blades, associate director, and Bob Skrabal, financial analyst, both of AM Best, review a recent market segment report that shows the U.S. non-standard automobile sector has started to show improvement after a long period of unfavorable results. Click on http://www.ambest.com/v.asp?v=nonstandardauto119 to view the entire program.

According to the AM Best market segment report, the U.S. non-standard automobile insurance segment experienced a difficult decade, with an average combined ratio of 106.5. That figure improved in 2017 and continued to improve in the first half of 2018.

Skrabal addressed the difficulties non-standard automobile writers experienced in the past decade, and what factors are behind the more-recent shift.

“Rising frequency and severity, as well as adverse selection and increased competition from standard automobile writers, were the main reasons for the difficult decade,” said Skrabal. “However, most of the positive shift is due to aggressive rate increases taken by automobile insurers in 2017 and 2018.”

Blades spoke about the biggest challenges U.S. non-standard writers will likely face in 2019.

“Going forward, U.S. non-standard automobile companies will have to embrace the uniqueness and the unique risk challenges that are presented by insurers that seek out U.S. non-standard automobile coverage, as well as handling the basic blocking and tackling in terms of making the right risk selection and charging the proper prices,” he said.

To access a copy of this market segment report, titled, “Early Signs of Improvement in Nonstandard Auto Market,” visit http://www3.ambest.com/bestweek/purchase.asp?record_code=281439.

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^AMBestTV covers exclusive AM Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View ^AMBestTV episodes at http://www.ambest.tv.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.