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With its host of natural disasters, 2017 was expected to be a bad year for commercial insurance companies, and new report from Fitch Ratings has confirmed expectations.
The commercial lines had a combined ratio of 103.8%, leading to an underwriting loss in the market overall since 2012. In addition to 2017's hurricanes and wildfires, several years of cyclical pressure on premium rates also contributed toward gradual deterioration in results over the last three years, the report says.
There was some positive news. Net written premiums were up 2.4% in 2017 and direct volume 2.6% higher for 2017. The report predicts that increases in pricing in some segments should lead to higher premium volume in 2018. Premium growth is expected to benefit from the slightly better economy with an increase in payrolls and business receipts. Growth in business investment and an uptick in construction activity would also promote commercial lines revenue.
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Rosalie Donlon
Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].
