Press Release - MAY 09, 2019
AM BestTV: Commercial Automobile Writers Hampered by Medical Costs, Loss Trends, Says AM Best Associate Director
FOR IMMEDIATE RELEASE
OLDWICK - MAY 09, 2019
For 2019, AM Best is maintaining a negative market segment outlook on the commercial automobile segment. Blades addressed some of the reasons for the negative outlook.
“Inadequate rates in conjunction with adverse prior loss reserve development have been two big keys that have continually plagued the marketplace and have definitely caused poor results,” said Blades. “Additionally, medical cost inflation from diagnoses, medications, surgeries and the higher cost of automobile repairs, all associated with accidents have increased the loss severity.”
Blades also spoke about what changes would cause AM Best to consider revising its negative outlook on the segment.
“There would have to be underwriting and pricing changes, along with risk selection,” said Blades. “Changes in things that are impacting claim costs and expenses. Having all those factors come together and actually start having some impact on the bottom line. Also, adverse losses or prior year losses moving in a more positive direction. These are the things that would factor into AM Best considering a change in its overall outlook.”
To access a copy of this market segment report, titled, “U.S. Commercial Automobile Results Continue to Deteriorate,” visit http://www3.ambest.com/bestweek/purchase.asp?record_code=284139 .
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