Hitting the Brakes Looking Back and Learning From Motor Losses. Clemens Reidel

Transcription

1 Hitting the Brakes Looking Back and Learning From Motor Losses Clemens Reidel

2 3

3 Let s take a look in the rear mirror Combined Ratio Auto vs. Rest of P&C market 110.0% 108.0% 106.0% 104.0% 102.0% 100.0% 98.0% 96.0% 94.0% 92.0% 90.0% E Source: AM Best and Swiss Re Institute Combined Ratio Total US P&C Combined Ratio All Auto 4

4 Let s take a look in the rear mirror 85.0% Loss Ratio 80.0% 75.0% 70.0% 65.0% 60.0% Source: AM Best and Swiss Re Institute E Loss Ratio Total US P&C 5

5 Let s take a look in the rear mirror 85.0% Loss Ratio 80.0% 75.0% 70.0% 65.0% 60.0% Source: AM Best and Swiss Re Institute E Loss Ratio Total US P&C Loss Ratio Total Auto 6

6 Let s take a look in the rear mirror 85.0% Loss Ratio 80.0% 75.0% 70.0% 65.0% 60.0% Source: AM Best and Swiss Re Institute E Loss Ratio Total US P&C Loss Ratio Personal Auto Loss Ratio Commercial Auto 7

7 Let s take a look in the rear mirror 29.0% Expense Ratio Auto vs Rest of P&C 28.0% 27.0% 26.0% 25.0% 24.0% 23.0% 22.0% 21.0% Source: AM Best and Swiss Re Institute E Expense Ratio All Auto Expense Ratio Total US P&C 8

8 Let s take a look in the rear mirror 10% Premium vs. Loss Development 8% 6% 4% 2% 0% E -2% -4% NPW growth yoy Losses Growth Total Auto yoy Source: AM Best and Swiss Re Institute 9

9 Let s take a look in the rear mirror 10.0% Auto Premium Inflation vs. Consumer Price 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% Motor Vehicle Insurance CPI Source: US Department of Labor 10

10 Trends in the rear view mirror and in front of us Vehicle Miles Fuel prices Economic growth High employment rate New vehicle sales Technology Distracted Driving Advance Driver Assistance Systems Usage Based Insurance / Telematics Physical Damage Repair cost Auto parts and used vehicle price inflation Bodily Injury Plaintiff bar focus on commercial traffic accidents Nuclear verdicts Medical inflation 11

11 Hot spot trucking losses Most responsive to correlation of economic factors increasing miles driven Trucking sector under pressure due to: Shortage of qualified drivers Age and health condition of drivers Cost pressure due to regulatory requirements, changes to supply chain and competition Self-insurance of large fleets Commercial auto cases focus of specialized plaintiff bar Requires early resolutions $281m Heckman Water TX, 2013 $45m Ranger Construction FL, 2017 $40m Landstar GA, 2011 $32m JB Hunt IN, 2015 $27m Greyhound OH, 2016 $178m Bhandal Bros CA, 2013 $34m Landstar LA, 2015 $32m Silva Trucking CA, 2013 $30m Dillon Trucking TX, 2015 $23m Moen VA, 2015 $165m FedEx NM, 2015 $90m Western Star LA, 2013 $15m Total Transportation MS, 2017 $58m Standard E&S NM, 2013 $42m Concrete Design OH, 2013 $36m Schneider National CA, 2012 $27m Dorlan Crane IL,

12 Vehicle miles as premium factor Sources of personal auto premium leakage in 2016 Technology supports monitoring of Mileage - Telematics and app solutions provide data - Cognitive solutions to capture odometer image - Diagnostics report from vehicle Garaging License plate recognition Impact on claims handing Filing of claim is an opportunity for outreach Rescission based on material misrepresentation, (e.g. Nationwide v. Faircloth, No (8th Cir. 2016)) Mandatory liability and PIP benefits may remain payable 13

13 Technology as benefit and loss driver for the future Distracted Driving Cell phone related crashes increased 51% over 2009 rates 3.5x more than all crashes. Numbers understated in reporting. Advanced Driver Assistance Systems First studies show moderate impact on frequency and severity but increased cost for repair, replacement and calibration Automated driving (Level 3+) Introduction in the next 5-15 years for affluent consumers. Full benefits delayed until major fleet penetration. Source: Swiss Re Source: AAA in Source: Sociey of Automotive Engineers in 14

14 Opportunities for Claims Claims plays a pivotal role as potential for premium growth is limited Embrace Technology & Automation even though technology and automation is not going to solve current challenges in the claims environment anytime soon Focus on core claims strategy Triage Investigation Adjudication 15

15 16

16 Legal notice 2018 Swiss Re. All rights reserved. You are not permitted to create any modifications or derivative works of this presentation or to use it for commercial or other public purposes without the prior written permission of Swiss Re. The information and opinions contained in the presentation are provided as at the date of the presentation and are subject to change without notice. Although the information used was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the details given. All liability for the accuracy and completeness thereof or for any damage or loss resulting from the use of the information contained in this presentation is expressly excluded. Under no circumstances shall Swiss Re or its Group companies be liable for any financial or consequential loss relating to this presentation. 17