(wire)
Commercial insurance remains stable
The outlook for the U.S. commercial insurance market is stable, despite soft market conditions, less favorable loss releases, and a shrinking economy, according to A.M. Best.
Key indicators suggest that rates will flatten later in 2010, with the need to compensate for lower investment yields and an overall weakened economy leading to the price shift.
Best added that sub-par investment returns and mark-to-market adjustments through last year were manageable, while U.S. commercial insurers saw balance sheets survive fairly well.
Meanwhile, Best noted that commercial insurers' profit margins should remain fairly solid, although they may not reach levels seen in years past.
In a statement, the ratings firm said "Commercial lines insurers are at a crossroad. Depending on which direction this segment moves in will set the tone for this segment for years to come. If competition intensifies in 2010, there's little doubt that this segment will suffer the consequences. Thus far, key indicators and behavior among most insurers does not suggest that this is the case."
Key indicators suggest that rates will flatten later in 2010, with the need to compensate for lower investment yields and an overall weakened economy leading to the price shift.
Best added that sub-par investment returns and mark-to-market adjustments through last year were manageable, while U.S. commercial insurers saw balance sheets survive fairly well.
Meanwhile, Best noted that commercial insurers' profit margins should remain fairly solid, although they may not reach levels seen in years past.
In a statement, the ratings firm said "Commercial lines insurers are at a crossroad. Depending on which direction this segment moves in will set the tone for this segment for years to come. If competition intensifies in 2010, there's little doubt that this segment will suffer the consequences. Thus far, key indicators and behavior among most insurers does not suggest that this is the case."
