Commercial property insurers accounted for more than half of the credit rating downgrades of commercial lines insurers last year, ratings agency AM Best Co. said. Inc. in a report on Friday.
Rising storm frequency and severity, inflationary pressures and supply chain factors continue to pose challenges for property insurers, said Best in Oldwick, New Jersey.
Insurers have responded with significant rate hikes and higher deductibles, among other measures, Best said.
There were 26 rating upgrades and 11 downgrades of commercial insurers in 2022, an improvement over 21 rating upgrades and 13 downgrades the previous year.
Workers’ compensation insurers accounted for a number of last year̵
7;s upgrades, due to favorable operating results and the previous year’s loss reserve development for the sector, Best said.The commercial segment faces headwinds, but remains solidly capitalized on a risk-adjusted basis due to its conservative investment profile, healthy reserve position and improved risk management discipline, Best said.
But U.S. property/casualty insurers saw fewer rating upgrades and more downgrades overall last year.
There were 36 rating upgrades, down from 54 the previous year, while the sector recorded 30 downgrades, up from 24 in 2021.
Market volatility and high inflation pressured insurers in virtually every industry, and private insurers had a tough year due to higher passenger car loss costs, increased catastrophe losses and increased reinsurance costs, Best said.
Source link
