Personal auto insurance rates appear set to increase at an accelerated pace, according to one analyst firm, and insurers may just be waiting on the market leader to lead the charge.
In an industry update, Stifel Nicolaus notes that a 2012 Q2 analysis shows that direct written premiums for auto insurers rose just 2.5 percent, year-over-year. Stifel Nicolaus analyst Meyer Shields, speaking to PC360, notes that the 2.5 percent increase is relatively in line with increases seen since 2011's third quarter.
The slower rate of premium growth compared to other insurance lines, he says, is an indication of a healthy market that is not volatile and does not see a lot of dramatic changes. However, Shields says loss costs are rising, and the recent trend of benign inflation “is starting to normalize.”
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