Commercial auto underwriting results took a U-turn in the right direction from 1999 to 2003, according to a new study by Conning Research and Consulting Inc.
The study, Commercial Automobile Markets: Solid Sectors, Worthy Gambles, and Risky Business, reveals that the 1999 combined ratio (117.8 percent) improved dramatically in 2003 to 95 percent. In addition, 2003 marked the first time in 16 years that the insurance industry earned a profit from commercial automobile underwriting.
The study explores premium rate changes, loss severity, and other factors that have driven the positive underwriting results and the underlying trends indicating a likely deterioration in the loss ratios into 2005 and 2006. The study analyzes differences in results by region and by business class to develop examples of segmentation strategies that are more likely to lead to superior results.
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