A.M. Best Releases Special Report on N.J. Auto Insurance

    OLDWICK, N.J.--Aug. 27, 2001--The New Jersey automobile market has been a bumpy road for insurers and consumers over the past 15 years, with larger potholes recently developing, according to a special report released today by A.M. Best Co.
    An excerpt of the report, "New Jersey Auto: Why Are Insurers Looking for the Exit Ramp?" can be found in the August 26 issue of BestWeek, A.M. Best's weekly news publication, and on the BestWeek Web site at www.bestweek.com.
    Since June, two of the nation's top-10 private-passenger auto insurers have announced their intention to exit New Jersey. A third insurer already is exiting, and two others have obtained regulatory relief. State Farm Indemnity Co., the largest auto writer in the state with a 17.2% market share and a subsidiary of State Farm Mutual Automobile Insurance Co. of Bloomington, Ill., and American International Insurance Company of New Jersey, the eighth-largest writer and a subsidiary of American International Group Inc. of New York, filed formal plans with the New Jersey Department of Banking and Insurance in June to withdraw from the state's private-passenger auto market. Together, these two companies write approximately 20% of New Jersey's private-passenger auto premiums and insure roughly 1 million vehicles in the state.
    Auto insurance has been a political "hot potato" for some time. It was a major factor in the 1997 gubernatorial election, prompting regulators and politicians to pass a reform in 1998 to decrease auto rates and implement initiatives to reduce loss costs for insurers. However, the reform has not been enough to keep insurers from wanting to exit the state, nor enough to attract market leaders to enter the state.
    BestWeek subscribers can download a copy of the 12-page special report free or a combination of the report plus the spreadsheet file of the data for $75 from the BestWeek site at www.bestweek.com. Nonsubscribers can purchase the report for $50 or a combination of the report and spreadsheet file for $100 at www.bestweek.com.
    A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.