2021 Insurance Industry Outlook: Navigating the Pandemic's Impact

Personal and Commercial Auto Insurance Trends

During a recent webinar hosted by Triple-I and Milliman, industry experts shared their insights on what the insurance sector can anticipate in 2021. Auto Insurance Report editor Brian Sullivan examined both personal and commercial auto insurance trends. For the first nine months of the year, private passenger auto liability written premium decreased by less than two percent, while losses incurred dropped by over 14 percent, resulting in loss ratios likely to be in the mid-50s. On the commercial side, Sullivan noted that commercial auto trends are not as robust as those for personal lines. Although losses have improved, the improvement is not as significant as in personal auto.

Workers Compensation Insurance in the Pandemic Era

Jeff Eddinger, senior division executive at the National Council for Compensation Insurance (NCCI), provided an early look at 2020 results for workers compensation insurance. The pandemic has plunged the U.S. economy into a recession, leading to significant job losses and changes in wage and rate levels, which have put downward pressure on premiums. NCCI estimates that private carrier net premium written will be down about 8 percent for 2020. Eddinger noted that while COVID claims did not overwhelm the system, there has been a drop in non-COVID claims due to more remote work and less work-related driving. Incurred losses decreased about 8 percent, in line with the drop in total premium, resulting in an estimated calendar year combined ratio for 2020 almost unchanged from 2019 at 86. This marks the seventh consecutive year of underwriting profit for workers compensation.

Navigating Uncertainty in the Insurance Industry

Despite the industry's financial strength, Eddinger warned of continued uncertainty. The vaccine rollout has begun, but new cases of the virus in the U.S. have soared to record levels. In addition to COVID claims, industry leaders are concerned about regulatory activity related to presumptions, the economic downturn, and the long-term impact of working from home. As the industry navigates these challenges, it is crucial for insurers to stay informed and adapt to the evolving landscape.

For readers, it is advisable to keep an eye on industry reports and updates, as well as to review their insurance policies regularly to ensure they are adequately protected in these uncertain times.