AM Best Shifts U.S. Personal Auto Insurance Outlook to Stable

2024-11-25
AM Best Shifts U.S. Personal Auto Insurance Outlook to Stable
Insurance rating agency AM Best has made a significant move by changing the outlook of the U.S. personal auto insurance segment. This shift comes as a result of the improving loss ratios of the top 20 carriers this year. Underwriting results have witnessed a remarkable improvement, thanks to insurers' efforts to increase rates in line with loss cost severity trends.

AM Best's Impact on U.S. Personal Auto Insurance

Improving Loss Ratios and Underwriting Results

Industry analyst Helen Andersen stated that insurers' actions on a state-by-state basis to address price inadequacy in their individual portfolios led to higher premium amounts. This, in turn, helped bring down the aggregate net loss and loss-adjustment expense ratio in 2023, despite continued increases in incurred losses. The higher premiums also contributed to lowering the line's underwriting expense ratio to its lowest point in a decade.Through the first half of 2024, direct premiums written for the personal auto segment showed a significant growth of 13.5% compared to the same period last year. The segment's first-half 2024 direct incurred loss ratio for auto liability was 71.1, compared to 75.6 for H1 2023. Additionally, the loss ratio for auto physical damage improved by 16 points to 63.2 in 2024.

The Role of a More Accommodating Regulatory Landscape

AM Best noted that addressing the need for rate adjustments quickly in the face of inflationary trends can be challenging while waiting for rate approvals. However, state regulators have been diligent in reviewing rate requests and have generally allowed carriers to accelerate the frequency and degree of rate filings. This has provided some relief to insurers and has contributed to the improvement in the personal auto insurance segment.Factoring in surplus gains primarily from strong net investment income, AM Best stated that capital lost in prior years has been replenished. The continued use of technology in claims, underwriting, and distribution by personal auto insurers has enabled them to recover from an overall net underwriting loss of more than billion in 2022 to a loss of about billion in 2023. The rating agency expects insurers to continue their focus on claims costs and effective underwriting.In conclusion, AM Best's shift in the outlook of the U.S. personal auto insurance segment is a positive development. The improving loss ratios and underwriting results, along with the support of a more accommodating regulatory landscape and the use of technology, are likely to contribute to the stability and growth of the personal auto insurance market in the coming years.

Article "tagged" as:

Related Article

How to Keep Your Kitten Safe While Playing

How to Keep Your Kitten Safe While Playing

While letting your kitten play and explore is important to its mental development, you need to make sure that what it's playing with is safe.
Kitten Development From 6 to 12 Weeks

Kitten Development From 6 to 12 Weeks

Learn how kittens develop during the first 6 to 12 weeks and what signs of development you need to look out for with these tips.
5 Common Foods In Your Pantry That Are Not Safe For Your Pets

5 Common Foods In Your Pantry That Are Not Safe For Your Pets

One potato chip is not going to hurt your pet, but there are other foods that can. Learn which to avoid and some safe foods that can be used as treats.
Fleas in Dogs

Fleas in Dogs

If a dog scratches, does that mean it has fleas? These biting bugs are no fun for dogs or their owners. Learn the causes, treatment, and prevention.
Can Dogs Eat Papaya? What to Know About Sharing This Tropical Fruit With Your Pup

Can Dogs Eat Papaya? What to Know About Sharing This Tropical Fruit With Your Pup

Papaya is safe for dogs in moderation, and it can even provide some nutritional value for them. However, too much can cause digestive upset, and it's not suitable to share with dogs with certain health conditions.
Can Dogs Eat Parmesan Cheese?

Can Dogs Eat Parmesan Cheese?

It's no secret that dogs love cheese, but what kinds of cheese should you avoid? Is Parmesan cheese a good option to treat your pup to?
10 Cat Breeds That Have Blue-Colored Coats

10 Cat Breeds That Have Blue-Colored Coats

Blue cat breeds have a uniquely colored coat that makes them stand out. The eye-catching blue coat often appears light to dark grey.
Sphynx: Cat Breed Profile, Characteristics & Care

Sphynx: Cat Breed Profile, Characteristics & Care

The sphynx cat is a hairless cat breed known for their playful and affectionate nature. These cats do have special needs. Learn about the sphynx cat breed’s appearance, temperament, health, and care.
Border Collie: Dog Breed Characteristics & Care

Border Collie: Dog Breed Characteristics & Care

Learn about the border collie, a popular herding breed. They're a smart and energetic dog that's also a great companion to the right pet parent.
Beagle: Dog Breed Characteristics & Care

Beagle: Dog Breed Characteristics & Care

Learn about the beagle, one of the most popular dog breeds in the world. They are known for being a cheerful, comical, loud, and energetic family dog.
How to Grow and Care for Living Stones

How to Grow and Care for Living Stones

Find out how to grow living stones, unique miniature succulents that look like pebbles. This guide covers how to care for living stone plants, including watering them just right to keep them thriving.
How to Grow and Care for a Money Tree Indoors

How to Grow and Care for a Money Tree Indoors

Money trees make beautiful, easy-care houseplants. Use this guide to grow a money tree indoors.
How to Attract Bluebirds to Your Yard: 11 Must-Know Tips

How to Attract Bluebirds to Your Yard: 11 Must-Know Tips

These tips on how to attract bluebirds will help you create a welcoming habitat. Discover the best types of foods, birdhouses, water sources, and more for attracting bluebirds.
How to Propagate Clematis from Cuttings and Layering

How to Propagate Clematis from Cuttings and Layering

Learn how to propagate clematis successfully with this step-by-step guide on two different techniques.
How to Plant and Grow Black Chokeberry

How to Plant and Grow Black Chokeberry

Learn how to use and care for this low-maintenance native shrub, including planting tips and the best types of black chokeberry to grow.
This Low-Water Garden Plan Will Look Vibrant Through Droughts

This Low-Water Garden Plan Will Look Vibrant Through Droughts

This low-water garden plan will keep your plants vibrant all throughout the hot, humid summer.
This Woodland Garden Design Overflows with Shade-Loving Plants

This Woodland Garden Design Overflows with Shade-Loving Plants

Easy-care native ferns add luxurious foliage from spring to fall. Other shade-loving perennials complement the soft textures with colorful blooms.
11 Essential Tips for Growing Vegetables from Seed for Beginners

11 Essential Tips for Growing Vegetables from Seed for Beginners

These beginner-friendly tips on growing vegetables from seed will help you successfully kick off your edible garden in spring.
Should You Use Shredded Rubber Mulch in Your Garden?

Should You Use Shredded Rubber Mulch in Your Garden?

Rubber mulch is widely touted as a game changer in landscaping, but does it live up to the hype? Find out the pros and cons of using rubber mulch.
How to Plant and Grow Cattail

How to Plant and Grow Cattail

Learn to care for this easy-growing aquatic plant, including tips for pruning, propagating, and planting.