Best’s Special Report: U.S. Property/Casualty Rating Actions Mixed as Insurers Face Pressure From Loss Trends

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)--
The U.S. property/casualty (P/C) insurance industry experienced a decline in Credit Rating (rating) upgrades and a modest rise in downgrades in the first half of 2022, with an increase in affirmations, highlighting how carriers have been resilient in the face of escalating losses, according to a new AM Best report.

Affirmations accounted for the bulk of rating actions in the first half of 2022, at 80%, while upgrades decreased to 5.5%, compared to 7.5% for the first half of 2021, according to the Best’s Special Report, “U.S. Property/Casualty Rating Actions Mixed as Insurers Face Pressure From Loss Trends.” Rating downgrades ticked up to 5.2% in first-half 2022, compared with 4.3% in the same prior-year period. Other main takeaways in the report include:

AM Best assigned 22 ratings (6.4% of total rating actions), up from 21 in the first half of 2021 (6.1%). Of the assigned ratings, 17 were in the commercial lines segment, three in the personal lines segment and one in the reinsurance segment.
In the first half of 2022, nine personal lines rating units were upgraded and 10 were downgraded, compared with 16 upgrades and six downgrades in the first half of 2021.
In the commercial lines segment, 10 ratings were upgraded and seven downgraded, versus 10 upgrades and nine downgrades in the first half of 2021.
AM Best’s outlooks on the U.S. P/C rating units remained essentially flat year over year, with a stable outlook continuing to make up the large majority, at 85.3%, up marginally from 84.3% at year-end 2021. Positive outlooks declined marginally, to 5.1%, from 5.7%.

Ongoing uncertainty about COVID-19, escalating loss activity due to an uptick in frequency and severity trends and elevated catastrophe activity will pressure the industry in 2022. AM Best will continue to monitor the companies and challenges in the industry and take rating actions when warranted.

To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=323409.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.