A report from AM Best shows credit ratings downgraded for many property and casualty personal lines insurers. The downgrades in the first half of 2023 totaled 21. That’s more more than double the 10 downgraded in the first half of 2022.
Commercial insurers didn’t fare much better. Ten of them saw downgrades and so did one reinsurer. The sum total for all lines in the first half of 2023 is 32. That compares to 18 in last year’s first half year.
Property and casualty downgrades were 9.1% of AM Best’s ratings decisions in the first half. Last year those downgrades totaled 5.2%.
By the way, personal auto insurers had 11 of the 21 personal lines downgrades. The return to underwriting profitability is unlikely according to AM Best and that’s one reason for the large number.
Another reason is weather-driven catastrophes.
Commercial lines accounted for five of the 10 downgrades in that category. Social inflation is the main reason.
All total, 38.7% of the downgrades were from declining operating results. Balance sheets that are weakened accounted for 22.6% of the downgrades.
The number placed under review in the first half of 2023 is more than double 2022 and accounts for 6.3% of the actions taken by AM Best so far this year.
Here are the totals:
Personal lines — 2023
Upgrades: 8
Downgrades: 21
Personal lines — 2022
Upgrades: 9
Downgrades: 10
Commercial lines — 2023
Upgrades: 13
Downgrades: 10
Commercial lines — 2022
Upgrades: 10
Downgrades: 7
Reinsurance — 2023
Upgrades: 1
Downgrades: 1
Reinsurance — 2022
Upgrades: 1
Downgrades: 0
Total — 2023
Upgrades: 22
Downgrades: 32
Total — 2022
Upgrades: 19
Downgrades: 18
Source link: Carrier Management — https://bit.ly/3Qweoke
