Personal Auto Claims On The Rise
According to an article in Property and Casualty 360, carriers have been experiencing modest underwriting losses on Personal Auto books of business since 2010. Losses in 2015 edged higher still compared to 2014 results, and the industry expects this trend to continue into 2016.
Some of the increase in claims costs have been attributed to more miles being driven due to the recent decreases in gas prices. Consumers have responded to lower fuel costs with an increase in transportation frequency and distance. Probably more significant, increased driver distraction from hand held devices, higher speed limits in some states, and fraud, have all affected industry loss ratios.
Trends in the industry such as this almost always spill over into our segment of the market, as we are the safety net for losses not covered by primary insurers. As a major regional provider of this coverage, we expected an increase in claims activity in 2015, and our expectations were met.
The good news is that, for us, the increase can primarily be attributed to record growth last year for our agency, almost exclusively from new account acquisitions. We would like to acknowledge that much of the credit for our growth goes to our agents, our carriers, and our client/partners because of their referrals. Given an opportunity to compare our portfolio of products and services, and discuss the benefits of our programs with fellow lenders, clients continue to find good reasons to partner with our agency.
More specifically on the loss front, we noted that the 3rd and 4th quarter of 2015 saw increases in claims activity that cannot entirely be explained by new account acquisitions. While the significance of this activity in our segment of the market is yet to be determined, our agency has experienced a great number of market ups and downs over the last 35 years. None of these have distracted us from the long term vision we have for our business, nor the long term commitment we have to our customers.
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