NEW YORK--(EON: Enhanced Online News)--Kroll Bond Rating Agency (KBRA) today released its outlook report on the U.S. property/casualty (P/C) insurance sector.
KBRA believes the P/C industry will essentially break even for the full year 2016 in terms of underwriting profitability, with a combined ratio of approximately 100. Challenges for the industry in 2016 and heading into 2017 include the highest level of insured catastrophe losses since 2012. This includes Hurricane Hermine, which was the first hurricane to make landfall in Florida since 2005, and Hurricane Matthew, which reached Category 5 status and caused considerable damage to Florida despite not making landfall until South Carolina.
In addition, the industry faces unfavorable loss trends in personal and commercial auto lines, where rate increases have been challenged to keep up with losses. Further, for pricing in lines other than auto, KBRA anticipates the continuation of decreased rates, but to a lesser extent than recent years. Commercial lines, reinsurance and catastrophe reinsurance are all expected to see low single-digit rate decreases.
Also dampening results are that year-over-year reserve releases have been decreasing (albeit still favorable) across most lines, with the exception of personal and commercial auto liability. Additionally, KBRA believes there is a potential need for significant increases in asbestos and environmental (A&E) reserves, predominantly due to asbestos.
To view the report click here.
About Kroll Bond Rating Agency
KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).