Best Insurer Rating Upgrades Increased in 2024 as Downgrades Dipped

Insurer credit rating upgrades increased in the US property-casualty insurance sector in 2024 while downgrades saw a decline, according to AM Best.

In a new special report, US Property/Casualty: Rating Upgrades Up, Downgrades Down in 2024, Best reported 43 downgrades of US property-casualty insurers in 2024, down from 55 the prior year. The rating agency noted that the change came despite ongoing challenging conditions in the personal lines segment.

Best cited inflation and increasing reinsurance costs as factors continuing to affect property-casualty insurers. Most of its 2024 downgrades were on insurers with property exposures and reflected increased catastrophe risk exposures, losses from more frequent secondary perils, and elevated reinsurance costs and retentions, Best said.

Best reported 42 rating upgrades among US property-casualty insurers in 2024, up from 35 during 2023. The rating agency said the improvement was driven largely by the commercial lines segment, which saw 34 upgrades during 2024 versus 12 downgrades. In comparison, the US commercial lines segment saw 21 upgrades and 15 downgrades in 2023.

Best said the most common factor in US property-casualty insurer rating upgrades was operating performance.

"The underwriting performance and overall reserve development for commercial lines insurers has been consistently solid, with positive pricing momentum and underwriting discipline positioning the segment to navigate the headwinds," Helen Andersen, industry research analyst at AM Best, said in a statement.

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