Best's Journal: Specialty Group of Insurers Responding Well to Fast-Changing Energy Market

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FOR IMMEDIATE RELEASE

OLDWICK - JULY 21, 2014 12:05 PM (EDT)
Specialty insurers and industry captives operating in the energy sector consistently have produced positive operating results over the most recent five years (2009-2013), as measured by pretax operating returns, according to the centerpiece report in the latest edition of Best's Journal, a biweekly publication that presents A.M. Best's original research, analysis and commentary on the global insurance industry. The report, titled "Specialty Energy Insurers Keep Pace with U.S. Customers, Competitors," states that the challenging business environment energy companies face means that the specialty group of insurers needs to remain responsive to the needs of their insured constituents. It is estimated that the U.S. energy industry pays annual premiums between USD 11 billion and USD 18 billion. Amid continuing consolidation, premium growth will be hampered; however, the specialty group's projected premium growth in 2014 ranges between 4% and 5%.

Other highlights in this issue of Best's Journal include as follows:

• Polar Vortex Chills Industry's Profitability, but Policyholders' Surplus Continues to Rise: Increased catastrophe and weather-related claims led to an increase in losses for the U.S. property/casualty industry in the first quarter of 2014. However, despite increased losses, the industry posted another quarter of profitable underwriting, producing a combined ratio of 96.4, up from 92.7 for the first quarter of 2013, according to a Best's Special Report.


• New IFRS Standard to Significantly Change Insurers' Public Financial Reporting: This Best's Special Report explores how the emerging international accounting standard for insurance contracts, known as phase 2 of the International Accounting Standards Board's insurance accounting project, will change the data that form one part of the material used by A.M. Best in the insurance sector.


• Draft: A.M. Best Ratings on a National Scale: This draft criteria report looks at A.M. Best's newly created national scale rating, which offers another way to utilize Best's Interactive Credit Rating Service, and describes the company's approach to providing a relative opinion of an insurer's financial strength within a single country, taking into account country-specific limiting factors the industry faces.


• Recent noteworthy Best's Credit Rating Actions, rating rationales and more.

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