US commercial auto insurers’ direct premiums written for the liability business line were significantly higher in the first quarter than in the same period in 2018, according to an S&P Global Market Intelligence analysis.
First-quarter liability direct premiums written grew year over year to $ 12.37 billion from $ 10.39 billion. The business line’s direct premiums written in the first quarter of 2018 was $ 7.81 billion. With commercial auto physical damage, the total US commercial auto direct premiums written for the first quarter equaled $ 15.65 billion. The loss ratio for total commercial auto was 64.1% in the first quarter of 2022, compared to a 61.2% loss ratio for the liability portion only in the prior-year period.
Starting in 2022, the figures for commercial auto will include physical damage within the business line as information is now broken out within the quarterly regulatory statements. In prior periods, physical damage included both personal and commercial auto, with personal auto accounting for the bulk of the premiums.
Industry leader The Progressive Corp.’s first-quarter direct premiums written for commercial auto liability jumped 36.3% year-over-year to $ 2.31 billion. Including commercial auto physical damage direct premiums written of $ 531.2 million, the company wrote a total of $ 2.84 billion commercial auto direct premiums. Progressive incurred a direct loss ratio of 68.8%.
The insurer said in its latest Form 10-Q that during the first quarter, written premium per policy for new commercial auto business increased 18% and renewal business increased 20% compared to the same period last year. The company said the increases were due to more vehicles per policy and a shift in the business mix toward higher premium coverage.
Almost all of the largest US commercial auto insurers logged loss ratios below 70%, except for Zurich Insurance Group AG, which had a 78.4% loss ratio.
CFO George Quinn noted in an earnings call that throughout “this hard phase of the commercial market” the company has had a distinct preference for taking rate on the risks that it knows, and continues to be cautious about new risks or risks that “shuffle around the market. “
“The market is continuing to bring us quite a better growth through rate, and I think we’ll continue to focus there,” Quinn added.
Best of the rest
The Travelers Cos. Inc. is a distant second in terms of market share with direct premiums written of $ 828.3 million, while Farmers Insurance Group of Cos. grew its liability direct premiums written by 117.6% to $ 670.3 million to leap into the top three. Farmers Insurance’s wrote $ 722.9 million for the commercial auto line of business.
Travelers and Farmers recorded loss ratios of 60.0% and 69.5%, respectively.
Travelers CFO Dan Frey said in an earnings call that the company’s loss ratio was “a point better” in the first quarter, which was tied to earned pricing being ahead of what Travelers is seeing in the loss environment.
* Download an Excel template to generate P&C market share reports based on data from annual or quarterly exhibits.
* Read an in-depth look into Progressive’s commercial auto success.