The Litigation Trends Behind Deteriorating Profits in Commercial and Personal Auto

The commercial auto line showed a spectacularly rapid deterioration of reserves beginning in 2012. In 2013 carriers begin to cite their trucking books as the source of increased frequency of severe claims, higher than expected large losses and deteriorating loss ratios. This recent GenRe article examines the causes which include:

  • A driver shortage affected the quality of the driver pool with more young, inexperienced drivers operating trucks.
  • Vehicle utilization levels increased due to an improved economy and lower gas prices.
  • Increase in vehicle miles travelled
  • Greater availability of safety data on motor carriers has led to attorneys use of this information to target commercial auto cases and win them.
  • Attorneys are succeeding in shifting responsibility from the person behind the wheel to the employer and winning large “nuclear verdicts” of over $10 million.
  • Increase in traumatic brain injury (TBI) cases. if an attorney can find an expert to allege a TBI, verdicts can be driven to higher levels. The “super experts” are winning TBI arguments in front of today’s jurors.

Some of these trends are the same ones affecting personal auto lines. The author warns that claims departments need to be prepared and proactive.

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