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Data analytics key to solving the puzzle of commercial auto insurance

Insurers are hesitant to write commercial auto insurance, but with appropriate use of data analytics the line can be profitable.

By Dax Craig | Updated on December 21, 2016

Commercial Auto is a highly troubled line of business for property & casualty insurers, suffering from historically poor performance, especially in trucking. This deters many insurers from writing certain business in the line entirely, eliminating a potential revenue stream, and plaguing those who are trying to create a profitable commercial auto portfolio.

Thomas F. Motamed, retiring chairman and CEO of CNA Financial, recently referred to the entire line as a “black eye” for the industry in the company’s third-quarter earnings call, citing an increase in distracted driving that leads to more highway accidents and deaths. Similarly, Fitch reported earlier this year that Commercial Auto is a “chronically underperforming product segment” due to overly aggressive pricing and heightened claim severity.

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Dax Craig

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