|Fitch Report: U.S. P&C Industry Outlook Remains Negative for 2009|
December 18, 2008
CHICAGO--(BUSINESS WIRE)--December 18, 2008--The U.S. property/casualty insurance industry is enduring tremendous challenges in 2008 as underwriting and investment losses have promoted a sharp decline in earnings and a material reduction in industry capital.
In a new report, Fitch discusses its current rating outlook, key items currently affecting market performance, and projections for 2009.
Industry statutory profitability in 2008 is projected to decline by over 80% from the prior year due largely to less favorable accident year underwriting results, sharply higher catastrophe related claims, and investment losses tied to declining equity markets and widening spreads in non-government bonds.
Results are not expected to improve significantly in 2009 as revenue growth is expected to remain relatively flat with premium rates anticipated at best to stabilize in most lines following a period of significant price declines in recent years. Underwriting results are also not anticipated to greatly improve as accident year loss ratios excluding catastrophes continue to increase and benefits from favorable loss reserve development lessen. Earnings will also be adversely affected by material realized investment losses in the near term.
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