OLDWICK, N.J.--(BUSINESS WIRE)--Financial impairments in the U.S. property/casualty (P/C) industry in 2013 plunged to their lowest level since 2007, amounting to little more than half of both the historical average and the 2012 impairment count. The 14 known P/C impairments in 2013, compared with 25 in 2012, were more in line with figures seen consistently during the 1970s. This report gives descriptions of the P/C 2013 impairments, and also updates A.M. Best’s historical P/C Financially Impaired Companies’ database for 1969 through year-to-date 2014.
While 2013 P/C impairments were well below the historical average count, they continued to far exceed life/health impairments, which reached an all-time low of one in 2013. To date, four P/C impairments have been reported for 2014.
The P/C industry’s 2013 financial impairment frequency (FIF)—a more accurate indicator of impairment trends than a mere count—was 0.43%, below the industry’s historical average of 0.81%. The 2013 figure was near levels recorded during the 1970s—except for 1975, when the FIF spiked to 1.09% following the trough of a soft market and an economic recession. In the current era, the 2011 FIF of 1.05% seems to have marked the peak for impairment frequency following the 2007-2010 soft-market trough and the 2007-2009 recession.
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