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FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 17, 2014 12:32 PM (EST)
The operating performance among small, regional and single-state writers of private passenger nonstandard auto policies has deteriorated over the past decade amid competitive pressure from large standard auto writers, according to a Best's Special Report titled "Under Pressure: U.S. Private Passenger Nonstandard Auto Market."
Aside from competition for market share, these smaller nonstandard auto writers have also contended with challenging economic conditions, limited scale, rising loss severity trends and fraud. These factors are not likely to subside in the near future. A.M. Best does not expect underwriting results, operating performance and capitalization to improve materially over the near to intermediate term.
"A M. Best anticipates that negative rating pressure will continue in the nonstandard auto market segment," the report states. The report also notes that this will especially be the case for companies within the A.M. Best's composite of private passenger nonstandard auto writers that have weak enterprise risk management, lower levels of technological advancement and lack of scale.
For a full copy of this special report, please visit: http://www3.ambest.com/bestweek/purchase.asp?record_code=230749.
This report originally appeared in Best's Journal, dated Nov. 10, 2014. Best's Journal is a biweekly publication that presents A.M. Best's original research, analysis and commentary on the global insurance industry, and is available exclusively as part of a subscription to the Best's Insurance News & Analysis service. More information about the Best's Insurance News & Analysis subscription service is available at www.ambest.com/sales/bina/default.asp.
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