NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases its U.S. Property and Casualty Insurance 2020 Outlook: Bedrock Capital Underpins Stability report, which examines the latest sector trends and activity into 2020.
In KBRA’s view, the U.S. property and casualty (P/C) insurance sector in 2020 is stable, based on our expectations that the industry’s strong capital, improved pricing, and disciplined underwriting will provide stability through the year. These industry strengths offset declining support to profit margins from decreasing favorable reserve development, increasing loss costs, social inflation, ongoing catastrophe losses, rising reinsurance costs and retentions, and low interest rates.
The industry has achieved record levels of policyholder surplus, which KBRA believes is sufficient to absorb catastrophes similar to those of 2017 or 2018 along with a moderate investment downturn. KBRA expects the industry to perform well into 2020 as insurers continue to actively manage these existing and emerging challenges.
An extreme tail event or elevated losses combined with low growth and low portfolio returns could weigh negatively on our outlook. Conversely, sustainable strengthening in profitability supported by a turnaround in negative loss trends, sufficient premium pricing, and growth of profitable business could provide momentum toward a positive outlook as the year progresses.
To view the report, click here.
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About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.