JLT Re Releases Commercial Auto Market Briefing
31 January 2019
- Attractive opportunities for selective underwriters in the U.S. Commercial Auto segment
- JLT Re expects to see further rate strengthening reflected in improved accident year profit margins for the top tier underwriters in 2019 and through 2020.
JLT Re (North America) Inc. (JLT Re), part of the global provider of reinsurance broking and consultancy, has today released a new Commercial Auto Market Briefing. This new report examines accident frequency and severity, corrective actions, auto insurance one-year reserve development trends, and a forward look at what’s to come for the commercial auto market.
Commenting on the report, Mark Shumway, Global Head of Strategic Advisory for JLT Re said, “Over the last ten years, even as a number of specialists have managed to earn underwriting profits in the segment, U.S. commercial auto has been difficult for multiline carriers. While serious problems remain, including inadequate accident year reserves and elevated claims frequency, remedial actions are now finally starting to prove sufficient for discerning carriers.”
JLT Re expects to see further rate strengthening and benefits from regulations and loss controls reflected in improved segment profit margins for the top tier underwriters in 2019 and through 2020.
“It is important to note that, in aggregate, the commercial auto line will likely continue to pose challenges for the next several financial years, particularly as carriers recognize deficiencies in their accident year loss reserves,” Shumway continued.
JJ Johnson, Executive Vice President of JLT Re’s Transportation practice added, “When we look back at the Commercial Auto Market as a whole and certainly preceding the shift in loss development in 2011 from favorable to unfavorable— we are bullish on certain carriers and producers that are specialized and diligent in their pricing and underwriting approach, as well as cognizant of their mix of business.”
“It really is not a new thing; we have indices where specialized groupings have historical 10-year combined ratios below 95%, with the very best carriers regularly below 90%. There are certainly accretive innovations and regulations that will impact the industry; however, it will still always depend on how these shifts and changes are taken into account from an underwriting and pricing perspective. In short, there is no quick fix or silver bullet,” Johnson concluded.
Read the full report here.
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NOTES TO EDITORS:
About JLT Re
JLT Re is the world’s fourth largest reinsurance broker, with approximately 800 professionals across 38 locations in 18 countries, delivering world class risk analysis and risk transfer solutions.
Our deep specialist knowledge and extensive experience of both the reinsurance market and clients’ own industry sectors enables JLT Re to deliver innovative solutions tailored to meet client needs.
We provide clients with broking and consultancy services across all classes of treaty and facultative reinsurance, including aviation, marine & energy, terrorism & political risk, trade credit, life accident and health, cyber, workers compensation and structured products.
JLT Re has a proven capability to provide a range of advisory and capital markets services specifically to insurance industry clients on a global scale.
Our ground breaking proprietary modelling tools and market leading analytical capabilities and personnel enable us to bring analytical rigour and a unique perspective to clients.
JLT Re is part of the Jardine Lloyd Thompson Group plc. www.JLTRe.com
About Jardine Lloyd Thompson
Jardine Lloyd Thompson is one of the world’s leading providers of insurance, reinsurance and employee benefits related advice, brokerage and associated services. JLT’s client proposition is built upon its deep specialist knowledge, client advocacy, tailored advice and service excellence.
JLT is quoted on the London Stock Exchange and owns offices in more than 40 territories with over 10,000 employees.
Supported by the JLT International Network, it offers risk management and employee benefit solutions in 135 countries. For further information about JLT, please visit our website www.jlt.com and follow us on LinkedIn at JLT Group and Twitter @JLTGroup.