Fitch Ratings expects that revenue and earnings growth for U.S. insurance brokers in 2013 will remain relatively stable compared to levels ultimately reported in 2012.In a new special report, Fitch discusses key factors supporting the Stable Rating Outlook for the insurance broker market, trends in operating performance and credit fundamentals, brief updates of recent events and the rating rationale for individual brokers in the rating universe.
Fitch anticipates that most U.S. insurance brokers could report low to mid-single digit organic growth and modestly improved profit margins in 2013, aided by favorable premium rate trends across many insurance segments.
The competitive fundamentals of the property/casualty insurance market and tepid pace of the global economic recovery will nevertheless continue to challenge more meaningful improvement in operating performance.
Fitch expects credit trends in 2013 to be favorable, driven by expectations for moderate earnings growth coupled with largely stable outstanding debt levels and modestly lower run rate interest expenses. While performance over time varies by company, Fitch expects that the brokers' performance will remain consistent with investment-grade debt ratings.
The full report '2013 Outlook: U.S. Insurance Broker Industry' is available at 'www.fitchratings.com.'