Best’s Market Segment Report: US Commercial Auto Insurance Segment Stuck in Reverse As Losses Keep Mounting

OLDWICK, N.J.--(BUSINESS WIRE)--

The U.S. commercial auto insurance line continues to burden the overall property and casualty (P/C) industry, accounting for more than $10 billion in net underwriting losses over the past two years, according to a new AM Best report.

The Best’s Market Segment Report, “Stuck in Reverse: Commercial Auto Losses Keep Mounting,” states that the segment’s rising loss severity, increasing claims costs and adverse prior-year loss reserve development continue to produce net calendar year underwriting losses for commercial auto insurers. The commercial auto insurance sector has now generated an underwriting loss for the 14th consecutive year. In fact, the losses are getting worse: total underwriting losses in 2024 were $4.9 billion dollars. Over the past 11 years, the average underwriting loss has been a little over $2.9 billion annually.

“One bright spot to note is that during the past decade, insurers have trimmed about six percentage points off their underwriting expense ratio for commercial auto insurance,” said Christopher Graham, senior industry analyst, AM Best. “While commercial auto insurers are not recognized as often as personal auto insurers for adopting and leveraging technology through their operations, commercial auto insurers have nevertheless made some strides in improving their efficiency.”

According to the report, the difference between auto liability and physical damage results has been stark and diverging. The underwriting expense ratio is relatively similar for the two coverages, with both improving by approximately three percentage points of improvements compared with the expense ratios six to seven years ago. The difference in the net loss and loss adjustment expense (LAE) ratio for the coverage parts, however, has typically been significant and far higher for liability coverage. The distinction between compulsory liability coverage and optional physical damage coverage may lead to insureds finding physical damage coverage not worth the cost. “Even if insureds find benefits in physical damage coverage, they may opt for higher deductibles to pay less for coverage,” Graham said.

The report also notes that despite significant rate increases, commercial auto insurers have not been able to offset rising loss severity driven by inflation, rising replacement costs due to technological advancements and rising labor costs related to repairs. “Adverse loss development has been a constant drain on commercial auto results and is getting worse,” said David Blades, associate director, AM Best.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=358186.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Christopher Graham
Senior Industry Analyst,

Industry Research and Analytics

+1 908 882 1807

christopher.graham@ambest.com

David Blades
Associate Director,

Industry Research and Analytics

+1 908 882 1659

david.blades@ambest.com

Christopher Sharkey
Associate Director, Public Relations

+1 908 882 2310

christopher.sharkey@ambest.com

Al Slavin
Senior Public Relations Specialist

+1 908 882 2318

al.slavin@ambest.com

Source: AM Best