Will the Commercial Auto Market Improve?
- With the auto sector taking rate increases, what are business owners doing to minimize the increase to their bottom line?
- What procedures are they putting in place to minimize the rate increase?
- What does the future look like and how will auto rates impact future budgeting cost for business owners???
According to April’s issue of the Insurance Journal, A.M. Best seems to be making a one-step-forward, two-steps-back prediction: things are getting better, but rate increases are in the mix.
According to the Insurance Journal, the rating agencies see more deterioration in the net combined ratio, which should lead to companies pushing for more rate increases. The added rate hikes should, A.M. Best reported, “bring the line closer to rate adequacy amid the ongoing escalation in current-year loss costs.”
Will there be rate hikes? Time will tell, but all indications suggest rates increases are on the way. The commercial auto market is being challenged by three major factors:
- There are more vehicles traveling more miles, boosting accident frequency
- The shape of American roadways is the worst it’s been in a generation
- Distracted driving is, unfortunately, on the upswing
A.M. Best analysts believe the American commercial auto market should improve somewhat, despite the company’s discouraging forecast. That forecast stems from commercial auto insurers having taken steps to address their most problematic exposures, while previous years’ loss reserves are still adversely affecting current calendar results.
“The rated commercial auto insurers report that they have implemented myriad measures aimed at addressing the issues they considered the most problematic relative to exposures to commercial auto losses, risk management, underwriting and pricing,” the A.M. Best report noted. “Unfortunately, based on industry profit and loss results, these enhanced underwriting pricing measures have yet to improve rate adequacy.”
Those actions, in part, have included multiple years of rate increases.
These days, California businesses need professional assistance navigating through new insurance rules and advisories that are constantly being introduced. Whether or not you’re prepared for A.M. Best’s prediction, Van Beurden Insurance is!
I’m pleased to offer you a no cost, no obligation Risk Assessment of your auto policy, which I can bundle with other lines of business to reduce costs. If you would be willing to invest 10 minutes of your time, I’d like to explain my process and the positive impact our alternative approach could have on your business.At the very least, I can guarantee you valuable information will come from our conversation.
Contact our office for more information.