Commercial auto provides nearly $30 billion in premium

Small and middle market businesses account for nearly 95% of the total

The commercial auto insurance market provides some $29.8 billion in premium, with small commercial and non-employer accounts providing $18.57 billion in premium, or 62.2% of the total, and middle market accounts adding $9.7 billion (32.4%). National accounts provide $1.6 billion in premium (5.4%), according to data compiled by MarketStance, Middletown, Connecticut.

There are six sectors that provide more than $1 billion in commercial auto premium. Construction businesses represent the largest sector, accounting for $7.66 billion, or 25.7% of the total. It is followed by retail trade with $6.83 billion (22.9%); transportation, communication and utilities with $4.87 billion (16.3%); services with $4.74 billion (15.9%); wholesale trade with $1.83 billion (6.1%); and government with $1.69 billion (5.7%). Other sectors providing less than $1 billion in premium include agriculture with $805 million (2.7%); manufacturing with $733 million (2.5%); finance, insurance and real estate with $396 million (1.3%); and mining with $273 million (0.9%).

One of the concerns for agents and underwriters of commercial auto is inclusion of private passenger-type automobiles, as well as SUVs and minivans, since these are easier to use for personal use and could require coverage enhancements that allow for such use.

Not surprisingly, among the major sectors, government and services are the two where more than half the vehicles insured under the commercial auto policy are private passenger-type vehicles. In the government sector 1,966,944 of the 4,000,878 commercial vehicles are private passenger-type automobiles, or 49.16% of the total, and an additional 384,382 are SUVs or minivans (9.61%).

In the services sector, 8,492,161 commercial vehicles are insured, of which 4,092,038 (48.19% of the total) are private passenger-type automobiles and 502,206 are SUVs or minivans (5.91%).

In the sectors that represent less than $1 billion in commercial auto premium, the finance, insurance and real estate sector has the highest percentage of private passenger vehicles under coverage, with more than 90%. In that sector, there are 526,903 commercial vehicles, of which 455,069 (86.37%) are private passenger autos and 19,763 (3.75%) are SUVs or minivans.

Pickup trucks and vans represent 36.6% of the commercial auto premium for the retail trade sector, the largest percentage among the leading sectors. It also has the largest percentage of premium for light and medium trucks at 27.8%.

Premiums for heavy and extra heavy trucks represent 13.5% of the construction commercial auto premium, making it the highest percentage in the major sectors.

For additional information on this market, contact MarketStance at (888) 777-2587 or e-mail at info@marketstance.com.