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US COMMERCIAL MOTOR SECTOR POSTS BEST RESULT IN A DECADE
The US commercial motor insurance sector in 2020 posted its best underwriting results in a decade, with its combined ratio improving by nearly eight points to 101.6%, according to a report by Fitch Ratings. The report attributes the improvement to the “unprecedented decline” in claims that accompanied the drop in miles driven amid pandemic-driven lockdowns. The 2020 accident year reportedly saw a 26% decrease in liability claims. The sector continued to be plagued by unfavourable reserve development in 2020, accounting for more than seven points of the combined ratio. Fitch said the sector will see additional improvement to near break-even levels in 2021, with favourable development from 2020 offsetting unfavourable development from earlier periods. Beyond 2021, Fitch expects US commercial motor insurers to see increased costs from litigation, jury awards and settlements.
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