Rating Actions Slow: P/C Industry Outlook Stable

Despite the impact of natural catastrophes and the financial crisis on property/casualty insurers in 2008, the vast majority (76 percent) of ratings actions by A.M. Best were affirmations. In its 2008 Rating Trend Review, A.M. Best analysis shows that upgrades and downgrades each accounted for 4 percent of rating actions last year. Nevertheless, A.M. Best notes that upgrades barely outpaced downgrades in 2008 after a strong positive trend in 2006 and 2007. Downgrades of p/c insurers totaled 57 in 2008, up from 43 in 2007 but still down sharply from 97 in 2004. Upgrades totaled 59, returning to levels seen in 2004 and 2005 after a sharp spike to 128 in 2006 and 87 in 2007. Upgrades in commercial lines outpaced downgrades 33 to 32, while personal lines insurers saw 25 upgrades and 24 downgrades. Reinsurers saw one upgrade and one downgrade. Rating changes in 2008 were down to 20 percent of all rating actions from about 25 percent over the preceding four years. Check out latest I.I.I. presentations on the state of the P/C insurance industry.  

One thought on “Rating Actions Slow: P/C Industry Outlook Stable”

  1. Does anyone really believe that the rating agencies can be impartial when their very income depends on P&C companies to subscribe to the rating agencies and pay them for developing a rating for their companies?

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