If you want some idea as to where general auto insurance is heading in the industry as a whole, look at what is going on in commercial auto insurance. According to a 98-year-old Connecticut research firm, as goes business insurance, so goes the rest of the industry.
This is according to a recent study by Conning & Company, a Hartford-based research and analysis firm with close ties to the financial services and insurance industries. The study, entitled “Commercial Automobile Insurance: The Multi-Specialty Road Ahead,” strongly suggests that what happens in business auto coverage is a good indication of what will happen in the auto insurance market as a whole, thus giving insurers an idea of what to expect in the future – as well as consumers when they go to get car insurance.
Not Only the Insurance Industry
Clint Harris, who is an analyst at Conning, says that “Principal commercial automobile industry segments, such as construction and trucking, are leading economic indicators for the general economy” as well. In addition to the building and transportation industries, the Conning study examined auto dealerships as well as auto repair and service establishments and car rental agencies. This trend can also be used to predict trends in other lines of commercial property and casualty lines.
Increased Diversification
What the Conning study also highlighted was the increased fragmentation of the commercial car insurance market, which a public relations firm’s press release says is “dominated by multiline generalists and ‘multi-specialist groups.” What this means is that in order to find car insurance, businesses increasingly rely on insurers that offer a range of insurance products on all types of property, not just vehicles.
Of course, many consumers have found it easier to get cheaper car insurance by going through larger companies that offer several different lines of property and casualty insurance – particularly when they have homeowners insurance or other property insurance with the same company. What the Conning study suggests however is that small-to-mid-size insurers that offer only auto coverage may be forced to expand into other lines in order to remain competitive.
About Conning
Conning & Company was founded in 1912 for the purpose of providing advice to institutional investors interested in insurance stock. This was not long after Massachusetts auto insurance company, Amica, started offering the first auto coverage; Conning has been involved with this particular line of the industry since its earliest days.
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