Hard Road Ahead for Commercial Auto Insurance

This Week in Analytics: News

Hard Road Ahead for Commercial Auto, Emerging Risks for Insurance & Global Economy, Analytics Transforming Claims Process, Insurance Innovation, Insurance Industry Job Growth


PropertyCasualty360: A Harder Road Ahead for Commercial Auto

While the story for commercial lines in general continues to include overall softening conditions as excess capital and capacity drive competition, Commercial Auto/Trucking is heading in the opposite direction, with some companies exiting parts of the market and rates generally on the rise.

The need for harder market conditions in Commercial Auto — particularly within certain segments — has been recognized for a few years, even if the timing was in doubt.

In 2014, during a conference call to discuss Q1 results that year, W. Robert Berkley, then-COO and current CEO and president of W.R. Berkley Corp., called the Commercial Transportation segment “a great puzzle” and noted the line had long seemed ripe for a hardening that hadn’t come. That same year, Fitch Ratings noted price deterioration prior to 2011, combined with an erosion of underwriting standards, had led to underwriting losses and unfavorable reserve development. A recent Insurance Information Institute (I.I.I.) chart illustrates that the combined ratio for Commercial Auto crossed the 100 mark in 2011, and remained there through 2014 after eight straight years of combined ratios lower than 100. Read the full article now…


PropertyCasualty360: 21 Emerging Risks for the Insurance Industry and the Global Economy

Turmoil in emerging markets, increased localization of internet networks within country borders and financial repression are some of the risks identified in this year’s Swiss Re SONAR “New emerging risk insights” report.

The report offers insights into emerging risks, those newly developing or evolving risks whose potential impact and scope are not yet fully acknowledged.

The report also highlights human-induced earthquakes, mass migration, a crisis of trust in institutions, and technology-related topics, such as the rise of precision medicine and distributed energy generation. Read the full article now…


PropertyCasualty360: 4 Ways Analytics Can Transform the Claims Process

When it comes to claims processing, insurers are obsessed with cycle time.

They count the days it takes to make a claim adjudication decision, the minutes it takes to complete the loss intake process, and the seconds it takes to process a transaction. Especially in high-volume environments, time is money.

In the wisdom of insurance claims executives, faster claim payments generally equate to better customer satisfaction and loyalty. Anything that slows the process is burdensome and costly. Insurance companies are always looking for ideas on how to improve or optimize the claims process. Read the full article now…


Insurance Thought Leadership: Can Insurance Innovate?

It’s a simple question — can insurance innovate? Think about your answer; I will give you mine at the end of this post.

Here’s a quick story from an insurance book that helps set the stage for how the industry got to where it is today:

There once was a membership association called the American Insurance Underwriters (AIU). The AIU acted as an agent for member insurance companies in international markets. Each member insurance company held a percentage of the AIU pool by which payments and liabilities were assigned.

In the 1960s, an AIU member bid on a contract to insure a large church in Boston. But the insurance company didn’t bid the insurance like everyone else. Instead, the insurer created a tailored contract with its own rate calculations, “rather than the standard forms and prices other (AIU) insurers had agreed to use.”

The incumbent insurer was not pleased: Read the full article now…


PropertyCasualty360: 7 Biggest Areas for Insurance Industry Job Growth

A few sectors within the insurance industry experienced consistent job creation in recent years, while others saw fewer people doing more work, according to a new report from the New York City-based Insurance Information Institute.

The III’s presentation is based on year-over-year employment data from the U.S. Bureau of Labor Statistics. That data dates back to 1990. Overall, the research indicates that in roughly five years, and despite some employment volatility within specific sectors, the insurance industry has added more than 100,000 new jobs.

Speaking by telephone from his New York City office on Wednesday, Steve Weisbart, the III’s senior vice president and chief economist, said the data provides a solid view of where new employees coming into the insurance industry are likely to find work. Read the full article now…


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