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FOR IMMEDIATE RELEASE
OLDWICK - FEBRUARY 07, 2017 09:34 AM (EST)
Credit rating activity in 2016 turned positive as upgrades outpaced downgrades for the U.S. property/casualty (P/C) industry, despite facing headwinds that include pressure on underwriting results and the low investment yield environment, according to a new A.M. Best special report.
The Best’s Special Report, titled, “Upgrades Outpace Downgrades for Property/Casualty Carriers in 2016,” states that the number of Long-Term Issuer Credit Rating (Long-Term ICR) upgrades, as a percentage of all rating actions on P/C carriers, increased to 7.3% in 2016, compared with 5.2% in the previous year. Conversely, the number of Long-Term ICR downgrades fell to 4.6% compared with 6.7% in 2015 of total actions on rating units.
In 2016, A.M. Best took action on the Long-Term ICRs of 786 rating units, a small decrease from the prior year. Consistent with the prior four years of rating actions, the overwhelming majority (81.9%) were affirmations.
Overall, the percentage increases on rating upgrades were driven by individual company trends of positive operating performance over several years, steady growth in risk-adjusted capitalization that supported higher rating levels and acquisition/affiliation with more highly rated companies and groups.
The following are some other highlights from the report.
To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=258420 .
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.