U.S. commercial auto insurers face some blips and disruptions on their road to profitability due to inflation and the spotty post-pandemic economic recovery, according to a new Standard & Poor’s Global Ratings report.
The sector got a break in 2020 because COVID-19 restrictions led to significantly less driving, something that was particularly compelling on the commercial auto insurance side of things. That year, accident fatalities involving large trucks and buses dropped nearly 13 percent to 4,565 fatalities. Nonfatal crashes in the space plunged 14 percent to 156,707, according to statistics the S&P report cites from the U.S. Dept. of Transportation’s National Highway Traffic Safety Administration.
Now, however, the economy is recovering and more commercial (as well as personal) auto drivers are returning to the road. S&P Global Ratings predicts more miles driven, along with inflation, supply shortages, a shortage of experience drivers and rising litigation costs will delay any positive momentum for the sector, at least in the short term.
Truck accidents are typically caused by driver error such as failure to follow speed limits, distracted driving, fatigue, mechanical failures and poor road conditions, S&P said.
“We believe underwriting profits for commercial auto insurers will likely remain elusive as the economy opens back up,” S&P said.
The full report is “Commercial Auto Insurers Face a Long Haul To Profitability As The U.S. Economy Reopens And Confronts Shortages.”
Source: Standard & Poor’s.