Best’s Journal: A.M. Best Summer Industry Survey Pegs Low Interest Rate Environment as Chief Concern

OLDWICK, N.J.--()--The persistent low interest rate environment remains at the forefront of insurers’ concerns, according to A.M. Best’s summer 2014 insurance industry survey. The view on when and if rates may climb varies by segment and company size. A.M. Best completed its first quarterly survey of the insurance industry in mid-August 2014. Companies have responded to low interest rates with a wide array of asset allocation strategies in order to stave off declining portfolio yields, according to this report featured 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.

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

  • U.S. P/C Underwriting Performance Weakens, But Policyholders Surplus Sets New Record: Increased catastrophe and non-catastrophe losses and lower levels of favorable development of prior years’ loss reserves drove the U.S. property/casualty industry to break-even underwriting results in the first half of 2014.
  • Surplus Notes Issuance Showed Growing Investor Appetite in 2013: Surplus notes continue to be a mainstay of insurers’ capital management alternatives. Based on the period since 2000, insurance companies have been able to effectively utilize surplus notes as opportunistic sources of capital, as investors have had an increasing appetite in spite of such risks.
  • Change Ahead for U.S. Monetary Policy?: This Best’s Views looks at how the U.S. economy performed in the second quarter of 2014, following a first quarter that saw growth contract.
  • Recent noteworthy Best’s Credit Rating Actions, rating rationales and more.

Best’s Journal is available exclusively as part of a subscription to the Best’s Insurance News & Analysis service, and is delivered every two weeks as a bound, printed publication and in digital format via the Best’s Insurance News & Analysis website. Each issue is an installment in a cumulative business resource that provides insight from A.M. Best’s perspective as a credit rating agency, data provider and news publisher with a unique focus on the insurance industry.

To learn more about Best’s Journal, watch a brief video at www.ambest.com/sales/aboutbestsjournal.html. More information about the Best’s Insurance News & Analysis subscription service is available at www.ambest.com/sales/bina/default.asp. To order, contact Customer Service at (908) 439-2200, ext. 5742 or at (800) 424-2378 when calling from the U.S. and Canada.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best Co.
Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com

Contacts

A.M. Best Co.
Jim Peavy
Assistant Vice President, Public Relations
(908) 439-2200, ext. 5644
james.peavy@ambest.com