In 2022 A.M. Best downgraded credit ratings on several insurance firms. Commercial property insurers saw the most downgrades. In total, Best upgraded the ratings on 26 commercial lines insurers and dropped the ratings on 11 of them.
The good news in the bad news is that it’s an improvement over 2021 when there were 21 upgrades and 13 downgrades.
Pressure from inflation, supply chain troubles and — worst — rising storm frequency and severity are the main reasons.
To battle those issues, commercial property insurers raised rates and implemented higher deductibles.
In addressing overall property/casualty insurers, there were 36 upgrades in 2022. That’s down from 54 the year before. There were 30 downgrades, up from 24 in 2021. A.M Best’s Helen Anderson said market volatility and high costs for personal auto combined with more and higher numbers of catastrophe losses are the reason for the personal lines troubles.
“Market trends are likely to continue impacting US personal lines insurers negatively,” Andersen said. “The commercial segment also faces headwinds but remains solidly capitalized owing to its conservative investment profile, sound reserve position, and enhanced risk management discipline.”
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