Transportation: The Road Ahead
The transportation industry and companies with a large fleet exposure are again experiencing more extreme pricing increases due to the poor results in the commercial auto insurance sector, where combined ratios exceeded 110% in 2017. This is happening despite a modest increase in overall average insurance pricing.
In our latest market update, The Road Ahead, Marsh looks at how despite a three-year trend in premium rate increases, recent loss development continues to outpace historic trends as insurers continue to pay out greater amounts of claims than premiums earned. An increased severity trend is also affecting buffer and excess markets, as the frequency of severity climbs along with the medical inflation. So-called “nuclear” verdicts (for example, amounts exceeding $10 million with little rationale as to how the amount was derived) are back in the headlines after a short reprieve in 2016.
Meanwhile, motor vehicle claims accounted for the second-highest total awarded values for the National Law Journal’s Top 100 Verdict Report in 2017, with 19 verdicts totaling $886 million. Medical malpractice, totaling $336 million, ranked third.
Read or download The Road Ahead.