The Auto market is looking to enter 2015 on cruise control, which is not necessarily the best news. Pricing remains relatively flat, the chances of negotiating rate cuts are slim, claims severity is increasing on certain fronts, additional competition is entering the market, and the need to underwrite risks carefully is more important than ever. Still, promising new developments on the claims management front, especially with new federal driver regulations and the rising use of telematics, offer a tantalizing glimpse into a market environment that could provide some serious mileage for those who are best suited to take advantage of it.
According to Daniel E. Aronson, New York-based managing director and the U.S. primary casualty placement leader at Marsh USA, Commercial Auto insurers are engaging in significantly different underwriting with every account because the market's experience is not as strong as it is in other casualty lines.
“The issue is differentiation of risk,” notes Aronson, who characterizes the Commercial Auto insurance rate environment as fairly stable. Rates, on average, are flat to a couple of percentage points higher. Most risks can expect favorable renewals, while problem accounts may see high single-digit rate hikes at worst.
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