Best’s Special Report: Highly Innovative Personal Auto Carriers Have Significant Competitive Edge
May 02 2024 - 11:25AM
Business Wire
U.S. personal auto insurers are the furthest ahead when it comes
to innovative processes like automated claims management and the
use of data to automate underwriting, according to a new AM
Best report.
Not all auto writers are at the same level, and carriers that
are more innovative have a competitive advantage and are reaping
benefits, yet even some innovation leaders still struggle to
transform their initiatives into underwriting profitability. These
are among the key findings in a new Best’s Special Report titled,
“Highly Innovative Personal Auto Carriers Have Significant
Competitive Edge.”
AM Best has been scoring and assessing insurers’ innovation
efforts since 2020, which reflects its important role in helping
insurers keep pace with a changing market environment. “Personal
auto as a line of business is well suited to innovation,” said
Helen Andersen, industry research analyst, AM Best. “Carriers deal
with large homogenous risks, allowing initiatives to be scaled and
replicated relatively easily.”
According to the report, personal auto carriers that are deemed
highly innovative capture greater market share, grow their business
faster, and have lower combined ratios than insurers that are not.
In the U.S. property/casualty industry, net premium growth (NPW) is
highly correlated with higher innovation scores. Since
2018, the more innovative companies have outperformed the
industry, having achieved more than double the average NPW growth
than the industry. Accelerating changes in technology and in
consumer tastes and preferences make innovation even more critical
for greater returns.
Among insurers that primarily write personal auto business,
carriers designated as an innovation “Leader”
have seen average NPW growth of 13.3% since 2018, compared with
only 5.5% growth for AM Best’s personal auto insurers’ composite.
AM Best downgraded the ratings of 18 U.S. personal auto carriers in
2023; among these, non-innovator categories (Minimal and Moderate)
are overrepresented relative to the total population.
To access the full copy of this special report, please visit
http://www3.ambest.com/bestweek/purchase.asp?record_code=342524.
AM Best is a global credit rating agency, news publisher and
data analytics provider specializing in the insurance industry.
Headquartered in the United States, the company does business in
over 100 countries with regional offices in London, Amsterdam,
Dubai, Hong Kong, Singapore and Mexico City. For more information,
visit www.ambest.com.
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Helen Andersen Industry Research Analyst +1 908
882 1629 helen.andersen@ambest.com
Christopher Sharkey Associate Director, Public
Relations +1 908 882 2310
christopher.sharkey@ambest.com
Al Slavin Senior Public Relations Specialist +1
908 882 2318 al.slavin@ambest.com