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Indian River County Board of County Commissioners <br />Where we are: What we're seeing now <br />• Commercial Auto claim frequency is almost back to pre -pandemic <br />levels. <br />• Large jury awards in Commercial Auto insurance, with penalties in <br />excess of $10 million, are becoming increasingly prevalent.3 <br />• Social inflation is leading to larger and catastrophic claims, particularly <br />affecting companies with large fleets. <br />• The median rate change for Auto policies was 6.1 %, with 64% taking <br />increases in Q4 2021. This is a slight increase from Q3 2020, when the <br />median rate increase was 5.7% and 66% saw increases. <br />Where we're going: Trends we are watching <br />• Companies with large fleets or poor loss history may experience more <br />significant rate increases. <br />• Carriers insuring large fleets are looking to attach excess layers above <br />$1 million. <br />• Expect to see more and more Umbrella/Excess carriers require clients <br />to put up a $2/$5 million primary Auto Combined Single Limit (CSL). In <br />very rare cases, we have seen clients put up a $10 million <br />CSL. <br />Gallagher <br />6O CORE 360- <br />04 2021 Commercial Auto <br />Rate Changes <br />Gallagher — U.S. Clients <br />i Decrease 0 Flat 0 Increase <br />6.1% <br />median rate change <br />in Q4 2021* <br />• If a carrier will not increase their primary limit, clients may have to find an additional carrier to put up a <br />buffer layer, adding frictional costs. <br />• Inflation, driven by higher parts prices, supply chain imbalances, and in increase in the cost of raw <br />materials has impacted the Commercial Auto space. The inflation in the used car marketplace has <br />increased dramatically, essentially increasing the value of every car on the road. <br />3 https://www.i)roi)ertycasualtv360.com/202 <br />