Despite better pricing, commercial auto still has a way to go before it rebounds from its long-term problems, according to W.R. Berkley Corp.’s president and CEO.

“It is very clear that the market is more well priced today than it was yesterday, but there is still room for improvement,” W. Robert Berkley Jr. said during the company’s Jan. 29 Q4 2019 earnings call.

Berkley’s comments involve a sector whose combined ratio was above 111 in 2017 and is still losing money for many carriers. This is happening despite rate increases in most quarters recently, researchers from The Nolan Company noted in their recent Carrier Management article. A Guy Carpenter study last fall noted that commercial auto insurance hasn’t produced an industrywide combined ratio below 105 in the United States since 2010. Factors for the sector’s continued troubles are wide ranging, from more distracted driving to more miles driven because of economic expansion and lower unemployment.

Berkley also noted those factors, pointing out that commercial auto “very much lost its way some number of years ago” and continues to struggle to find its way to better business dynamics. The solution, he said, isn’t so clear cut.

“While people have…pored through the data, I’m not sure if anyone has a perfect answer” as to how to solve the sector’s problems, Berkley said.

He added that this trend showed that commercial auto has “a little more tail to the business than some people had appreciated” and that the industry “has been playing a game of catch up” since its troubles reached their worst.

As far as W.R. Berkley Corp., the company has been aggressive in reducing its costs and liabilities in the space, W. Robert Berkley Jr. said.

“We’re willing to take a more forceful position and may have gotten further down the path than others because of that,” he said, noting that other players in the space generally are on the same page about the need for more commercial auto rate increases.

“The marketplace, generally speaking, understands that it needs rate and continues to push for rate,” he said.

Berkley hesitated to dive deeper into the issue, however, because commercial auto is a diverse sector for which individual segments have different exposures and challenges.

“There are different pockets within the commercial auto space, so it varies by exposure. It varies by territory,” he said. “The fact is that different carriers are at different places as far as rate adequacy.”

All of that said, Berkley expressed hope that the commercial auto market rebounds and pledged that W.R. Berkley Corp. would be there if it does.

“If they continue to evolve in a positive direction, I think you will see our participation in the auto market grow, and grow significantly over time,” he said. “Having said that, we’re going to have to see whether market conditions continue to improve or if they do a U-turn, no pun intended.”