Commercial Auto Insurance Trends: The Stats on Rising Rates & Emerging Risks


According to Risk & Insurance, on-the-road risks “are becoming more challenging to manage,” especially for auto fleets. Let’s take a closer look at what’s brewing for rates and risks in commercial auto insurance.

Rising rates

  1. Medical costs have been charting an upward path for the last three years and counting. In 2018, expenses stemming from services and drugs are projected to rise at 6.5 percent, “outpacing the economy.”
  2. Vehicle repair costs are on the rise, too, having climbed by 2.7 percent in 2016 due to price hikes on labor and parts.

Emerging risks

  1. Remember the driver shortage that auto fleets are facing? (Who could forget?) R&I said that the shortfall for commercial drivers could surpass 175,000 within the next eight years.
  2. Meanwhile in cyber security, some university researchers managed to hack into a truck’s control system, causing it to accelerate without driver input and lose braking. To be sure, this is not a high-impact risk; nor is it likely to be a common one – but the researchers proved that it is possible.
  3. Fraud is also on the rise: The Coalition Against Insurance Fraud saw a 14 percent increase in fraudulent claims between 2015 and 2016. While medical claims had the highest incidence rate, auto claims weren’t far behind.
  4. A much more frequent risk is that of driving under the influence. In 2015, 43 percent of fatally-injured drivers were found to be using substances (including marijuana and amphetamines); a smaller percentage were using alcohol.
  5. Watch out for lawsuits. Through the last decade, personal injury lawyers have been seeking business from claimants after accidents. As a result, the number of “first-party lawsuits against auto insurers has quadrupled in some jurisdictions, even where the number of accidents has fallen.”
  6. Distracted driving continues to take the cake. In 2015, more than 3,000 people died in crashes involving a distracted driver; almost 400,000 were injured.

As the insurance landscape evolves, those who can adapt and overcome new challenges will succeed. A modern, nimble policy administration system equips you to do just that. Request a Silvervine Software Insurance Demo to learn more.