Despite improvements in underwriting results, property-casualty insurers remain underreserved for accident years 1997 to 2001 and have lost ground in trying to catch up, a rating firm said today.
Standard & Poor's in a report said for the nine months of 2005, p-c insurers lost ground in reserving for the years prior to 2001, experiencing $16 billion in adverse development for that period. The industry was able to reserve $13 billion during the two prior years.
"Insurers and reinsurers are no closer than they were a year ago to achieving full reserve adequacy for that business," said a statement from Siddhartha Ghosh, an S&P analyst.
The report, "Insurer Reserving Needs for Soft Market Years Remain Problematic," said that while State Farm and Progressive have favorable reserve levels, others--including American International Group, American Re and Berkshire Hathaway--need to strengthen their reserves.
While insurers appear to have adequate reserves in place for more recent loss events, S&P said it is skeptical whether adequate reserves for 2001 and prior years will be in place.
While asbestos and environmental losses make up a sizable chunk of the reserve developments, losses outside of these lines are worrisome, the report said, "as evidenced from significant adverse reserve development over the past few years."
Copies of the report can be purchased at [email protected].
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
