Every company licensed to write motor vehicle liability insurance in Massachusetts must be a member of CAR
Commonwealth Automobile Reinsurers, or its better-known name CAR, is the statutory body established by Massachusetts General Laws c. 175, § 113H that administers the Massachusetts Automobile Insurance Plan for personal motor vehicle insurance and the joint underwriting association for commercial motor vehicle insurance, including taxis and limousines. In addition to this function, CAR also acts as the state’s statistical agent for motor vehicle insurance under an agreement it has with the Division of Insurance.
As for CAR’s fiscal year, it commences on October 1 of each year until September 30th, of the next year. After the end of each fiscal year, it holds an annual meeting in which it issues an annual report. With respect to the facts and figures discussed below, the latest report relates to the period from October 1, 2022, to September 30, 2023. An official copy of the report can be accessed via a link at the end of this article.
For those interested in a simple synopsis of the report, however, Agency Checklists has abstracted some of the main points of interest from the report below.
2023 Financial Results
The following table highlights CAR’s financial results. In particular, the FY2023 underwriting result “…reflects adjustments to older policy year reserves offset by higher loss ratios projected by the Loss Reserving Committee for policy years 2022 and 2023 as of June 2023.”
2023 Data
The following chart demonstrates the current trajectory of the commercial residual market. CAR noted in the report that the small increase in the volume of ceded vehicles, “…mainly reflects increased exposures in the bus classes as these businesses are back on track post-pandemic.” In addition, CAR noted that the “3-year loss ratios reflect continued improvement in financial results for most classes.”
The Private Passenger Market and the MAIP
CAR administers the Massachusetts Automobile Insurance Plan (MAIP), which provides access to private passenger motor vehicle insurance to eligible risks who are unable to obtain such insurance through the voluntary market and ensures that the risks written through the MAIP are distributed equitably based on the quota share of each Member.
In the Annual Report, CAR said the following about this marketplace:
“With monthly assignment volumes exceeding pre-pandemic levels, the private passenger residual market share is now 0.75% of the total. The sharp increase in the number of assigned policies rated with MAIP rates contributes to this growth. Revised rates are currently under review, with a proposed effective date early next year.”
Statistical Agent for the Commissioner of Insurance
As the designated statistical agent for Massachusetts automobile insurance, CAR collects, edits, analyzes, and disseminates Massachusetts motor vehicle insurance statistical data as directed by the Division of Insurance. In its role as the statistical agent, CAR verifies the completeness of the statistical database and reconciles reported statistical data to company financial statements. CAR also performs an analysis that compares each company’s distribution of data to the industry’s distribution.
The Annual Report also noted that Massachusetts had welcomed eight New Insurers and New Reporters to its marketplace during 2023: four Private Passenger writers and four Commercial. The following is a list of the eight companies new to the Massachusetts automobile insurance market:
| Private Passenger | Commercial |
|---|---|
| Everspan Insurance | Amerisure Mutual |
| Liberty Mutual Fire | AmGuard Insurance |
| Nationwide Insurance of America | Pharmacists Insurance |
| Spinnaker Insurance | Watford Insurance |
How to access the full report
All of the graphs and data are reprinted here from the official CAR Annual Report. A copy of the official Annual Report can be accessed on the CAR website here.
