Auto Insurers Suffer Fifth Straight Year of Underwriting Losses
Despite rate increases, CAT losses and bodily injury claims weighed on 2012 results.
Insurance Networking News, March 20, 2013
Despite improved pricing, underwriting performance for personal auto insurers in the United States declined in 2012, according to “'Personal Auto Underwriting Performance,” from Fitch Ratings.
It was the fifth consecutive year of weak performance for the private passenger auto segment, Fitch said. Rates continue to increase in 2013, and a return to more normal catastrophe losses this year could lead to a modest underwriting profit, though, Fitch said.
“Several factors offset the benefits of better pricing in the segment including increased claims severity—particularly for bodily injury claims—and greater catastrophe losses due to the flood related losses of Superstorm Sandy,' said Dafina Dunmore, director at Fitch.
The findings are based on year-end GAAP results for the personal auto segment for insurers that breakout personal auto underwriting results in SEC filings or in supplemental earnings disclosures; results showed a modest profit in aggregate for personal-auto underwriting last year compared to 2011. Individual company results, however, were mixed equally between modestly improving or deteriorating results.
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