Conning, an investment management firm that also provides insurance research and strategic insights, has released its latest study, 2025: Commercial Auto Insurance Market – Challenges and Opportunities.
The report delivers a thorough assessment of one of the most consistently unprofitable segments in the property-casualty industry, focusing on financial strain, new exposures, and the underwriting practices that will shape the sector’s future.
The analysis notes that commercial auto insurance has posted underwriting losses for 13 consecutive years, with combined ratios remaining above 100% despite 55 quarters of steady rate increases.
Liability costs have surged as social inflation and large jury awards drive claim severity higher, rising more than 60 percent since 2015.
At the same time, the shortage of qualified commercial drivers in the United States has intensified operational risks for fleets, leading many companies to employ less-experienced drivers and thereby increasing accident frequency.
Repair costs have also climbed as a result of advanced vehicle technology, inflation, and supply chain disruption, all of which have extended claim resolution times.
Looking ahead, the growing adoption of electric vehicles adds new complexities, from cyber vulnerabilities to the heightened risks of battery fires and elevated repair expenses. These developments are forcing insurers to rethink pricing models and overall risk strategies.
Beyond these operational challenges, the report explores the role of regulatory changes, litigation trends, and broader economic pressures in shaping underwriting results.
Conning concludes that the path forward for insurers will require innovation, sharper pricing discipline, and a stronger commitment to operational efficiency in order to restore stability and profitability in the commercial auto market.
“Despite more than a decade of rate increases, the commercial auto line remains a challenge,” commented Alan Dobbins, a Director in Insurance Research at Conning. “Our 2025 study highlights the dual crises of escalating liability losses and post-pandemic physical damage costs, which continue to challenge insurers and policyholders alike.”
“The commercial auto market is at a crossroads,” Dobbins added. “Insurers will need to go beyond pricing adjustments and invest in predictive analytics, safety technologies, and smarter underwriting to restore profitability.”
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