| Copyright: | Business Wire | | Source: | Business Wire | | Wordcount: | |
CHICAGO--(BUSINESS WIRE)-- While industry reserves for the U.S. property/casualty industry were adequate at year-end 2008, the risk of the market moving toward a deficient reserve position is heightened going forward, according to Fitch Ratings.
In a new report, Fitch provides an analysis of property/casualty industry reserves at year-end 2008, examining recent reserve development trends, Fitch's estimate of industry reserve adequacy, and consideration of several statistical factors that reveal a recent modest weakening in reserve levels.
According to Fitch's analysis, the potential for the market to shift toward a future reserve deficiency is greater now due to the following factors:
-- Fitch's estimate that any redundancy in loss reserves for most recent accident years at year-end 2008 is more closely offset by projected deficiencies in asbestos and environmental losses, and other prior year exposures.
-- Continued reporting of strong favorable reserve development in 2009 first-half statutory reporting.
-- Questions whether the redundancy of hard market accident years 2003-2006 is now fully reflected in reported reserves.
-- Indications that most recent 2007 and 2008 accident years are more likely adequately reserved and will not develop redundantly over time.
For a copy of the report titled 'Property/Casualty Industry Loss Reserve Adequacy: At A Crossroads ' dated Nov. 2, 2009, please see the Fitch Ratings web site 'www.fitchratings.com' under the following headers: Sectors>>Insurance>>Topical Research & Special Reports.
Additional information is available at www.fitchratings.com.
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.
Fitch Ratings
Brian Bertsch, +1-212-908-0549 (New York)
brian.bertsch@fitchratings.com
James B. Auden, CFA, +1-312-368-3146 (Chicago)
Christopher A. Grimes, CFA, +1-312-368-3263 (Chicago)
Source: Fitch Ratings
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