JULY 23, 2020 02:23 PM (EDT)

AM Best: Pandemic Deals a Wild Card to U.S. Personal Automobile Insurers (AM BestTV)

 Lee McDonald
Group Vice President, Publication and News Services
+1 908 439 2200, ext. 5561


OLDWICK - JULY 23, 2020 02:23 PM (EDT)
In this episode of AMBestTV, David Blades, associate director, and Maxwell Gilberg, associate analyst, both of AM Best, said U.S. automobile insurers experienced improved underwriting results in recent years and have reacted quickly to dramatic swings in driving patterns caused by pandemic-related shutdowns. Click on http://www.ambest.com/v.asp?v=ambpersonalauto720 to view the entire program

“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 .

Recent episodes of AMBestTV include:

  • AM Best: India Non-Life Market Facing Challenges: Myles Gould, director, analytics, and Yuan Tian, senior financial analyst, both of AM Best, said that competition, poor pricing discipline and investments challenge the India non-life market: http://www.ambest.com/v.asp?v=india620 .

  • AM Best: Insurers Boost Private Equity Holdings 10% in 2019: Jason Hopper, associate director, industry research and analytics of AM Best, said that insurers have increased their private equity holdings by 10% year over year to $81 billion in 2019: http://www.ambest.com/v.asp?v=privateequity620 .

  • AM Best: Florida Personal Property Writers Challenged Even Without a Hurricane: Michelle Baurkot, director, and Chris Draghi, senior financial analyst, both of AM Best, said that Florida writers struggled to turn a 2019 underwriting profit even with the absence of a major hurricane: http://www.ambest.com/v.asp?v=ambfloridareport720 .

  • Insurtech Movement Joins Forces for Week of Presentations: The formation of the Northeast Insurtech Alliance, which is made up of innovation-focused executives from five organizations throughout the northeastern United States: http://www.ambest.com/v.asp?v=northeastinsurtechalliance720 .

AM BestTV covers exclusive AM Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at www.ambest.com/multimedia/ambtvsignup.html . View AM BestTV episodes at www.ambest.tv .

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.