Commercial auto insurance has been struggling to achieve underwriting profitability even before the recent inflationary conditions affecting property/casualty lines, according to a report by the Insurance Information Institute (Triple-I). Despite steady growth in premiums written, the decline in underwriting profitability has been driven by several factors, including increasing vehicle repair costs and litigation trends.
The report indicates that excessive injury and fatalities contribute to increased attorney involvement, leading to higher claim-related expenses due to larger settlements and protracted litigation. The report also found that nationally, commercial auto defense and cost containment expenses have nearly tripled over the past decade.
A recent study by Triple-I and the Casualty Actuarial Society (CAS) found that between 2014 and 2023, increasing inflation drove auto liability losses and cost containment expenses up by a range of $118.9 billion to $137.2 billion. The report suggests that increasing economic and social inflation continues to profoundly influence escalating insurance costs, contributing to higher prices for personal auto insurance and goods and services consumers buy every day.
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