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Commercial auto underwriting results took a U-turn in the right direction from 1999 to 2003, according to a new study by .

The study, “Commercial Automobile Markets: Solid Sectors, Worthy Gambles, and Risky Business,” reveals that the 1999 combined ratio (117.8 percent) improved dramatically in 2003 to 95 percent. In addition, 2003 marked the first time in 16 years that the insurance industry earned a profit from commercial automobile underwriting.

“The speed of the turnaround in commercial auto surprised many industry observers and even industry insiders,” said Clint Harris, analyst at Conning Research and Consulting. “Our analysis indicates that the positive results were widespread, but the recovery is unlikely to continue into 2005 and 2006 for the total industry. Therefore, insurers seeking underwriting profit will need to outperform their competitors.”

The study explores premium rate changes, loss severity, and other factors that have driven the positive underwriting results and the underlying trends indicating a likely deterioration in the loss ratios into 2005 and 2006. The study analyzes differences in results by region and by business class to develop examples of segmentation strategies that are more likely to lead to superior results.

“All key insurer groups — automobile specialists, generalists, and large, medium, and small insurer groups, as defined by premium size — have recorded rapid underwriting improvements,” said Stephan Christiansen, research director at Conning Research and Consulting. “Yet there are significant differences in profitability by region and business sector. Understanding and exploiting these differences can help companies position themselves to achieve superior results despite a return to a more difficult market.”

“Commercial Automobile Markets: Solid Sectors, Worthy Gambles, and Risky Business” is available for purchase by calling (888) 707-1177 or by visiting the company’s Web site at www.conningresearch.com.