AM Best 2024 Downgrades & Upgrades

AM Best released a report this week on insurance company downgrades and upgrades. In 2024 downgrades dropped to 43 from the 55 in 2023. The ratings company says, surprisingly, the drop in downgrades comes in spite of increasing challenges in personal lines.

The report is titled, US Property/Casualty: Rating Upgrades Up, Downgrades Down in 2024 and it says insurance firms struggled most of last year with inflation and the rising cost of reinsurance. The downgrades — however — were from a lot of property exposure to catastrophe risks, more losses in secondary buildings and property, and higher reinsurance costs, and the ability to retain reinsurance.

Most of the 42 upgrades — up from 35 in 2023 — were in commercial lines. That segment saw 34 upgrades and just 12 downgrades. In 2023 those numbers were 21 upgrades and downgrades totaling 15.

Personal lines insurers continue to be hard hit with 25.6% of them having negative outlooks at the end of 2024. That’s a significant rise from 2023’s number of 17.9%. Upgrades were largely given for operating performance. On that subject, 23.8% got a positive hike because of merging with higher-rated firms.

Downgrades — 34.9% — came from deteriorating balance sheets.

Source link: Reinsurance News — https://bit.ly/4bTSyjL