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Fitch Updates U.S. Property/Casualty Market 2009 Forecast

Source: Fitch

Posted on 11 Jun 2009

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The U.S. property/casualty insurance market experienced a sharp decline in performance in 2008 and faces significant challenges in 2009. In a new report, Fitch Ratings reviews the key drivers behind recently available aggregate statutory results for 2008 and updates the forecast for industry financial performance in 2009.

The property/casualty industry experienced unprecedented investment losses in 2008 due to the overall worldwide economic downturn. Underwriting results also deteriorated significantly relative to recent history as a result of increased accident-year losses and above-average catastrophe losses.

Fitch's Rating Outlook remains Negative for the U.S. property/casualty insurance industry for both personal and commercial lines insurers. Near-term market fundamentals are not supportive of a return to strong underwriting profits and previous double-digit returns on surplus.

Investment returns are expected to remain inhibited by low yields and recognition of other-than-temporary impairments (OTTI) into earnings. Underwriting performance is likely to suffer from deteriorating accident-year loss experience, and diminished favorable prior period reserve development in 2009.

To access this Special Report, "Property/Casualty Industry Statutory Results And Forecast," please visit the Fitch Ratings web site at under Financial Institutions > Insurance > Special Reports.