A.M. Best not thrilled with P/C industry, reiterating its negative outlook will continue into 2013. It cited market conditions and less favorable reserve development.
Quoth Business Insurance:
In a research note, the Oldwick, N.J.-based insurance rating agency said depressed investment yields and sluggish economic growth also will challenge the sector.
“This outlook is a continuation of the negative outlook that was first initiated on the segment in 2011 and remained in 2012,” the report states. “While the negative outlook remains, it is believed that sustained price momentum will continue in 2013 as commercial insurers attempt to combat the difficult operating environment through price increases.”
While noting that the sector will remain well-capitalized absent a major catastrophic event, A.M. Best said the sector’s loss reserves were deficient.
Not sure about this last, based on some cursory looks I’ve taken (viz. the accompanying chart) and the thoughts reflected in this article:
Analysts at two rating agencies, Fitch and Moody’s, believe property/casualty insurers’ prior-year loss reserve takedowns will continue to outpace reserve additions in 2013.