Fitch: Auto Insurer Underwriting Results Deteriorate In 2015

CHICAGO--(BUSINESS WIRE)-- Most leading personal auto insurance underwriters experienced deterioration in segment underwriting results in 2015, according to a new Fitch Ratings report. A review of full year 2015 for 10 publicly traded property/casualty insurers that breakout personal auto business in GAAP filings reveals an aggregate decline in underwriting profitability despite continued favorable premium growth.

The group of 10 accounts for approximately one-quarter of industry personal auto premiums and includes Berkshire Hathaway's GEICO subsidiary, Allstate, and Progressive, which rank number two, three, and four in market share.

Personal auto premiums increased by 7.5% during 2015 for the sample group, but the aggregate combined ratio for the sample group increased by over 2 percentage points versus 2014 results to 97.6%. Higher loss ratios are driven by claims severity trends that exceed general inflation levels, and a more recent shift toward unfavorable claims frequency patterns.

This deterioration in results is a precursor to higher premium rates going forward in private passenger automobile insurance. However, competitive forces will continue to challenge insurers' ability to sustain rate increases that keep pace with or exceed future loss costs changes.

The full report, 'U.S. Personal Auto Insurance Dashboard,' is available at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

U.S. Personal Auto Insurance Dashboard (March 2016)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=879093

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Source: Fitch Ratings