Press Release - DECEMBER 10, 2018

Best’s Market Segment Report: U.S. Personal Lines Outlook Held at Stable as Private Passenger Auto Segment Sees Turnaround

 Greg Williams
Senior Director
+1 908 439-2200, ext. 5815

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


AM Best is maintaining a stable market segment outlook for the personal lines segment of the U.S. property/casualty insurance industry in 2019, citing improved underwriting performance in the private passenger auto line of business, lower—albeit still elevated— catastrophe experience and favorable investment returns.

A new Best’s Market Segment Report, titled, “Market Segment Outlook: U.S. Personal Lines,” states that while the personal lines segment’s performance improved in 2018, leading to an all-time high in policyholder surplus, competition remains intense in the auto and homeowners segments with little significant consolidation. Furthermore, although rate increases will continue, the level of those increases likely will subside in the near term. AM Best believes the segment as a whole must continue to focus on pricing segmentation, product development, risk management and the leveraging of technology and innovation, particularly as ever-present issues such as changing demographics and customer behavior, along with climate change, become more pressing. Companies that lack the will or resources to do so risk being left behind in an increasingly competitive market.

The market segment report outlines other factors that are driving the outlook, including as follows:

  • Underwriting initiatives, including significant rate activity in the last few years, and relatively benign loss cost trends led to markedly improved results in the private passenger auto segment. Emerging factors such as proposed tariffs on automobiles and auto parts, as well as the continued legalization of cannabis, could negatively impact the segment in future years;

  • Although catastrophe losses to date are far less than those experienced in 2017, second-half 2018 loss activity has escalated. Still, rate increases, increased pricing segmentation and favorable reinsurance pricing has mitigated the detrimental impact on carriers; and

  • Moderately higher interest rates coupled with declining credit risk has created favorable trends in the equity markets; however, inflationary concerns have emerged, which could cause a deterioration in reserve adequacy.

To access the full copy of this market segment report, please visit .

For a video with Greg Williams, senior director, about the U.S. personal lines segment outlook, please visit .

To access AM Best’s market segment report on the U.S. commercial lines segment outlook, please visit .

AM Best is a global rating agency and information provider with a unique focus on the insurance industry.