NEW YORK, July 18, 2018
/PRNewswire/ -- Auto insurance has accounted for more of the
U.S. property and casualty (P&C) industry's premium volume in
recent years, with several rounds of loss-fueled rate increases
accelerating premium volumes in the short term, accordingly to
S&P Global Market Intelligence's 2018 US Auto Insurance Market
Report. Developments such as ride-sharing, the emergence of
autonomous vehicle technologies and the introduction of new
insurance pricing models threaten varying degrees of disruption to
a sector that has historically accounted for the largest segment of
overall P&C insurance premium volume.
The rate of growth on combined personal and commercial auto
direct premiums written is projected to pull back to 6.4% in 2018
and even lower through the subsequent four years from the 15-year
high of nearly 8% in 2017.
Tim Zawacki, Senior Insurance
Research Analyst at S&P Global Market Intelligence said,
"The auto insurance industry is poised to show significantly
improved underwriting results after several historically
challenging years. But the introduction of autonomous vehicle
technology raises key longer-term questions about policy pricing
and structure in a business line that has historically represented
about 40% of overall property and casualty industry premium
volume."
The auto insurance industry's financial results are projected to
reflect the impact of corrective actions taken to address surprise
spikes in the frequency and severity of claims, which had the
effects of pushing losses in 2016 and 2017 to their highest levels
since the start of the century.
For the personal auto business, S&P Global Market
Intelligence projects growth in direct premiums written will slow
to 6.3% in 2018 from 7.8% in 2017. Meanwhile, the projected 2018
growth rate for commercial auto direct premiums written is even
higher at 7.3%, but it also lags the expansion of more than 8.8%
that the industry achieved in 2017. The projected 2018 growth rate
is well in excess of the 4.1% pace of expansion projected for the
U.S. P&C industry as a whole, according to S&P Global
Market Intelligence.
Additional findings from the 2018 US Auto Insurance Market
Report include:
- Broad-based premium rate increases to address adverse
claims trends will bring the personal auto business closer to
break-even underwriting results.
- Commercial auto will pull back from the brink amid a
commitment by many leading carriers to raise rates and continued
macroeconomic growth.
- Consolidation of market share among the largest carriers
will continue in the increasingly commoditized personal auto
business.
- No dramatic shift in underwriting results over the next
five years directly resulting from the way in which auto insurance
is priced, underwritten and consumed.
For additional findings and a high level summary of the report,
please click here.
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Media Contact
Farhan
Husain
S&P Global Market Intelligence
+1 (212) 438.3271
Farhan.Husain@spglobal.com
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SOURCE S&P Global Market Intelligence