American International Group Inc. reported a $27 million favorable one-year loss reserve development in commercial auto liability lines for 2018, marking a small step in the right direction for that business line following recent woes.
Commercial auto liability had contributed to AIG's recent history of reserve charges, but this was not the case in the fourth quarter of last year. That said, the company did report $365 million in net unfavorable prior-year reserve development across all of its lines of business even as commercial auto liability saw improvement. Directors and officers liability, other casualty and employment practices liability insurance businesses in the U.S. accounted for much of AIG's fourth-quarter 2018 reserve charge.
Liberty Mutual Holding Co. Inc. and Travelers Cos. Inc. led the industry in adverse one-year reserve developments in commercial auto liability lines in 2018, with $252.6 million and $249.0 million, respectively. Over the past three years, Liberty Mutual has accumulated $807 million in commercial auto liability reserve charges.
Overall, 14 of the 20 largest writers of commercial auto liability insurance strengthened their reserves last year.