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US commercial auto insurers' liability premiums up nearly 10% YOY in Q2

U.S. commercial auto insurers' direct premiums written for the liability business line jumped to $11.54 billion in the second quarter, a 9.6% increase from $10.53 billion in the year-ago period, according to an analysis by S&P Global Market Intelligence.

Premium growth

When factoring in commercial auto physical damage, total U.S. commercial auto direct premiums written for the second quarter stood at $14.99 billion. The loss ratio for commercial auto liability excluding physical damage for the second quarter deteriorated to 72.3% from 67.5% in the second quarter of 2021. The total commercial auto loss ratio for the second quarter was 70.4%.

There have also been substantial commercial auto rate hikes in the first half of 2022. In June, commercial auto rate increases outpaced written premium reductions as only a handful of rate filings were expected to result in written premium reductions of more than $5,000.

Out of the top U.S. commercial auto insurers, The Allstate Corp. saw the largest year-over-year growth in second-quarter direct premiums written for commercial auto liability with an increase of 25.7%. However, Allstate held just 2% of the overall commercial auto market share for the second quarter, landing in a lower ranking among its peers.

Starting in 2022, the figures for commercial auto include physical damage within the business line, as this information is now broken out within quarterly regulatory statements. In prior periods, physical damage included both personal and commercial auto, with personal auto accounting for the bulk of the premiums.

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Loss ratios

Allstate also booked a loss ratio of 117.8% for the second quarter, which was the highest loss ratio reported among the top group of U.S. commercial auto insurers. During the insurer's second-quarter earnings call, Glenn Shapiro, Allstate's president of property-liability, said the company plans to write less new auto business where it cannot raise prices enough.

Shapiro noted that Allstate had not been able to get enough rate in New York or obtain any kind of auto increases in California, echoing comments from The Progressive Corp. CEO Tricia Griffith, who also lamented the rate environments in those states during the company's second-quarter earnings call. Progressive booked a loss ratio of 66.4% for the period.

Old Republic International Corp. booked the second-highest loss ratio for the quarter at 81.9%.

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Progressive on top

Progressive held 15% of the U.S. commercial auto market share in the second quarter, maintaining its long-held lead, followed by The Travelers Cos. Inc. at 5% and Zurich Insurance Group AG at 4%.

Berkshire Hathaway Inc. and Nationwide Mutual Group were the only insurers out of the group to see a drop in year-over-year direct written premiums for the second quarter, with declines of 1.3% and 3.7%, respectively.

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SNL Image* Read more about second-quarter results for the U.S. property and casualty industry.
* Explore more information about what will drive premium growth in the U.S. property and casualty industry.
* Read about the historic second-quarter property and casualty industry surplus erosion.