Insurance - Property & Casualty: P&C Annual Statutory Data: Commercial Auto Challenges Continue

Research evidence excerpt

Insurance - Property & Casualty: P&C Annual Statutory Data: Commercial Auto Challenges Continue

Foundation

May 18, 2026 04:01 AM GMT

Morgan Stanley & Co. LLCMInsurance - Property & Casualty | North America Bob Jian Huang

Equity Analyst

P&C Annual Statutory Data: Bob.Huang@morganstanley.comDaniel Lee, ACAS +1 212 761-6136

Research Associate

Daniel.Lee4@morganstanley.com +1 212 761-0219

Commercial Auto Challenges Siddhant Shah

Sid.Shah@morganstanley.com +1 212 761-2603

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Insurance - Property & Casualty

North America

While commercial auto profitability appears to be improving in Industry View Attractive

2025, this was largely due to Progressive's results. Stripping out

Progressive, Commercial Auto business remains under pressure

from what appears to be enduring social inflation headwinds.

We expect this line needs further rate.

Commercial auto profit improving, but not enough. Based on the latest 2025

statutory disclosures, the Commercial Auto line of business showed modest

improvement, with industry combined ratio declining 5.1pts YoY to 102.1% ( Exhibit

1 ). Larger states, such as California, Florida, and New York, are all seeing notable

YoY loss ratio improvements ( Exhibit 10 ). Direct written premiums increased ~7.6%

YoY to $77.7 billion, further indicating an improved environment. That said,

Progressive's combined ratio is substantially lower than rest of the industry on

Commercial Auto ( Exhibit 8 ). Stripping out Progressive, the industry's profitability

position remains challenged. As such, pricing has stayed firm with commercial auto

rates continuing to increase at a high-single-digit pace ( Exhibit 2 ), reflecting

carriers’ ongoing efforts to offset elevated loss cost trends. In our view, further rate