Fitch Ratings today has published a special report entitled
'Property/Casualty Industry Statutory Forecast Update'.
This report updates Fitch's U.S. property/casualty industry statutory
earnings forecast for full year 2012, last published in December 2011,
and introduces an initial projection for 2013.
"Fitch estimates that 2012's underwriting results will be a material
improvement over 2011; however, current returns on capital remain below
historical averages," said Jim Auden, Managing Director at Fitch. "The
year-over-year improvement is derived from several factors including
lower expected catastrophes and pricing increases."
Fitch believes that the current shift in the market cycle represents a
stabilizing force that supports insurer rating levels. While market
pricing has responded to underwriting losses more slowly than expected,
previous market turns were precipitated by considerably longer and
prolonged underwriting losses.
The projection for 2013 is for the industry to approach break even
underwriting performance and a return on surplus of approximately 7%.
Favorable pricing momentum is likely to continue through yearend 2012.
However, ample market underwriting capacity and competitive factors are
likely to dampen pricing trends as 2013 unfolds.
The full report 'Property/Casualty Industry Statutory Forecast Update',
dated Aug. 16, 2012, is available at 'www.fitchratings.com'
under 'Financial Institutions', 'Insurance' and 'Special Reports'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: Property/Casualty Industry
Statutory Forecast Update
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Fitch RatingsJames B. Auden, CFAManaging Director+1-312-368-3146Fitch,
Inc.70 West Madison St.Chicago, IL 60602orGerald
B. Glombicki, CPADirector+1-312-606-2354orMedia
Source: Fitch Ratings