Best’s Special Report: Credit Rating Upgrades Continue to Outpace Downgrades for U.S. Property/Casualty Carriers in 2017

By a News Reporter-Staff News Editor at Investment Weekly News -- Credit rating activity in 2017 for the U.S. property/casualty (P/C) industry remained positive for a second straight year as upgrades outpaced downgrades, even as companies experienced a historical year in terms of catastrophic weather losses and a persistently low investment yield environment, according to a new A.M. Best special report.

The Best's Special Report, titled, "Upgrades Continue to Outpace Downgrades for Property/Casualty Carriers in 2017," states that the higher proportion of Long-Term Issuer Credit Rating (Long-Term ICR) upgrades in 2017 was due to solid capitalization, improved technology and risk management capabilities, and ongoing acquisition and affiliation agreements with higher-rated companies. A.M. Best believes that the industry as a whole maintains sufficient overall risk-adjusted capitalization relative to its existing credit ratings.

The number of Long-Term ICR upgrades, as a percentage of all rating actions on P/C carriers, increased to 8.5% in 2017, compared with 7.3% in the previous year. Conversely, the number of Long-Term ICR downgrades fell to 2.8% compared with 4.6% in 2016 of total actions on rating units. A.M. Best took action in 2017 on the Long-Term ICRs of 720 rating units, which describes either an individual insurer or a consolidation of companies and is the financial basis on which A.M. Best performs its credit rating evaluations. The overwhelming majority of the 2017 P/C rating actions were affirmations (80%).

Keywords for this news article include: A.M. Best, Investing.

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