The US Auto Insurance industry will post a statutory underwriting loss in private passenger auto for the fifth consecutive year in 2012, according to a report by Fitch Ratings.
Spurred by several years of weaker segment performance, auto insurers increased rates during 2012 and this trend is continuing into 2013.
“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.
In a report published today, Fitch Ratings notes that underwriting performance remains below peak performance levels for U.S. personal auto insurers despite improved pricing. While full industry statutory results for major property/casualty industry business segments will be reviewed shortly, Fitch reviewed year end GAAP results for the personal auto segment for a group of insurers that breakout personal auto underwriting results in SEC filings or in supplemental earnings disclosures. Results for this group show a modest aggregate personal auto underwriting profit in 2012, comparable to 2011. However, individual company results were equally mixed between modestly improving or deteriorating results. Pricing improvements and a reversion to a more normal catastrophe loss experience will promote a modest underwriting profit in 2013.
Source: Fitch Ratings, posted March 20, 2013 - Loss Severity, Catastrophe Losses Dampen Results for U.S. Auto Insurance Sector
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