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FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 08, 2015 12:09 PM (EDT)
According to two special reports by A.M. Best, the property/casualty (P/C) industry’s rating activity over the first half of 2015 turned negative as downgrades and negative outlooks outpaced upgrades and positive outlooks, reversing a two-year positive trend, and the rating activity among domestic life/health (L/H) carriers’ issuer credit ratings (ICR) through mid-year 2015, when compared with the same period for 2014, has produced a slight decrease in affirmations and a reversal of the positive rating trends reported last year.
The U.S. P/C Best Special Report, titled, “P/C Industry Sees Negative Rating Activity in 2015, Reversing Positive Two-Year Trend,” states that the reversal in P/C ratings was generally caused by individual company trends of negative operating performance over several years; reductions in risk-adjusted capitalization to levels that were not supportive of current ratings due, in some cases, to aggressive premium growth outpacing policyholders’ surplus or changes in organizational structure as a result of increased or decreased parental support.
Some of the highlights from this P/C report include:
The U.S. L/H Best Special Report, titled, “U.S. Life/Health Insurers See Fewer Positive Rating Actions in 2015,” states that rating downgrades modestly outpaced upgrades, versus the prior year when upgrades significantly exceeded downgrades, as the challenging environment amid persistent low interest rates along with the impact of the Patient Protection and Affordable Care Act (ACA) begins to have more of an impact on ratings.
Some of the highlights from this L/H report include:
For the P/C and the L/H industry, rating affirmations remained the most common rating action at 82.6% and 83.1%, respectively.
For the full copy of the L/H special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=242212 .
For the full copy of the P/C special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=242247 .
A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source.