Financial results for the U.S. P&C industry were significantly improving as of late October, compared with substantial underwriting losses in 2011, despite challenges posed by persistently low interest rates, according to “Catastrophes Drive Underwriting Loss in 2012; Better Results Expected in 2013,” from
Superstorm Sandy, which hit the east coast on
“With over 60 percent of the segment coming from the more stable automobile business, rating affirmations will dominate again in 2013, although concentrated property writers who do not have adequate plans to address volatility in the line may come under continued rating pressure,”
A.M. Best’s outlook for commercial lines remains “negative” for 2013. “Insurers are still grappling with competitive market conditions, less favorable loss reserve development, sluggish economic growth and depressed investment yields; and these factors will most likely result in more negative rating actions than positive rating actions during this year,”
“Movement of reserves for more recent accident years and steps taken to bring pricing to levels that adequately reflect loss trends will be key areas of focus in commercial lines ratings,”
For the reinsurance sector, the company maintained its stable outlook, as it continues to be supported by “strong risk-adjusted capitalization, judicious enterprise risk-management practices and a relatively stable pricing environment across a broad array of business classes,” which should contribute to reinsurers’ overall financial position.
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