AM Best report reveals $10 billion underwriting losses in U.S. commercial auto insurance over two years, driven by loss severity, social inflation, and reserve issues.

In 2024, commercial auto insurers faced a $4.9 billion underwriting loss driven by an 8% annual increase in claim severity, highlighting persistent challenges from social inflation and risk management in the U.S. market.

Social inflation is increasing the severity and cost of U.S. workers compensation claims, driven by legal challenges, regulatory changes, and evolving claim management strategies.

Selective Insurance Group’s Q2 earnings fell short of expectations due to a combined ratio above 100%, driven by social inflation affecting casualty reserves. Shares dropped 19%, signaling market concerns over underwriting losses and claims cost pressures in the property and casualty insurance sector.