The economic downturn of the past few years had an enormous effect on the automotive industry. The industry has seen numerous bankruptcies, declining sales, and massive government intervention. Insurers have responded by increasing their scrutiny of automotive companies’ financials as they question the financial stability of the industry, including its commitment to loss prevention, engineering, and maintenance of current assets. A key element to any discussion with insurers should be to confirm the organization’s commitment to a high level of protection.

Looking Ahead

Absent any significant industry loss, the property insurance market for the automotive industry likely will continue to soften in 2010. Clients with a low loss profile and/or an exceptional loss history may experience new insurance capacity, and incumbent insurers may significantly increase their participation as a means to increase their premium dollars.