JULY 23, 2020 02:23 PM (EDT)
AM Best: Pandemic Deals a Wild Card to U.S. Personal Automobile Insurers (AM BestTV)
FOR IMMEDIATE RELEASE
OLDWICK - JULY 23, 2020 02:23 PM (EDT)
“In 2018 and 2019, U.S. property/casualty private passenger insurers generated decidedly improved underwriting results in comparison with the prior eight years,” said Blades. “During that longer period, the industry’s combined ratio was never lower than 101. Coming into 2020, the market was on an upswing, having produced combined ratios of approximately 97 and 98 in 2018 and 2019, respectively. … As a result, the industry generated a combined total of more than $7 billion in underwriting earnings during the last two calendar years.”
The COVID-19 pandemic has caused a number of miles driven by motorists to plummet in the first half of 2020, prompting many insurers to accommodate policyholders through rebates or refunds. Gilberg addressed whether these rebates or refunds will become a permanent part of the industry.
“Insurers are for-profit entities, unless there is a reason for extraordinary refunds or rebates. Generally, automobile insurers only apply discounts to drivers applying safe driving habits. Overall, AM Best does not believe that these rebates or refunds will become the norm in the future, at least at the levels recently applied.”
To access the related market segment report, titled, “Personal Auto Stuck in Neutral as Fewer Claims Offset Premium Losses,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=299226 .
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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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.