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2019 Forecast and Trend in Commercial Auto Insurance

Business

By Allen Chapman, Executive Vice President, HUB International Gulf South

Auto insurance rates presents a familiar scenario for buyers of auto coverage again in 2019: increasing rates and continued market constriction.  We are seeing auto rates across the board in every industry: sales fleets, contractor vehicles, livery and all commercial auto are being affected.  The insurance industry continues to be challenged with claims expense driven by litigation cost, increased cost of repair, increased frequency and severity due to distracted driving that has resulted in an average about 110% loss ratio.  Meaning that even with auto rate increases over the last few years, still for every $1 paid in premium, an average of over $1.10 is being paid out in claims.  This results in higher rates and fewer insurance companies willing to write commercial auto exposures.

Businesses should look to increase their investment in loss control efforts surrounding their auto exposure.  Equipping vehicles with telematics that can detect and alert the driver and management of hard breaks, turns and accelerating can help to alter driver behavior and improve results.  Dash cameras can also be an effective measure of capturing the reality of what happened in the event of an accident.  Be sure to communicate your increased safety measures to your insurance broker / agent so that they can in turn use that information in discussing your account with the underwriter, to help soften the increase on rate. Lastly, a sharp focus on driver recruitment and incentive for safe driving should be included as part of the response to rising auto rates in a tough environment.

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