US Property-Casualty Insurer Credit Rating Upgrades Trend Upward
February 17, 2022
Credit rating upgrades among US property-casualty insurers returned to pre-pandemic levels in 2021, according to a new report from A.M. Best.
Upgrades increased to 7.7 percent of all US property-casualty rating actions in 2021, compared with 5.3 percent in 2020, according to the A.M. Best special report, "P/C Rating Upgrades Increase for 2021 as Insurers Adjust to Pandemic."
Total rating actions for US property-casualty insurers decreased slightly to 704 in 2021 from 721 in 2020, Best said. Rating affirmations accounted for most of the rating actions in 2021 at 80.3 percent, according to the rating agency.
Best said that many US property-casualty insurers strengthened their balance sheets and improved operating results while navigating the COVID-19 pandemic, heightened inflation, and elevated loss costs.
The report said commercial lines insurers saw rating upgrades increase slightly to 21 in 2021, while downgrades also ticked up to 13.
The number of property-casualty companies' ratings placed under review dropped to 25 in 2021—its lowest number in 5 years—decreasing from 33 in 2020, Best said.
Best said it assigned 36 ratings to US property-casualty insurers in 2021, with 27 in the commercial lines segment, eight in personal lines, and one in reinsurance.
Uncertainties around inflation and elevated loss costs could put unforeseen pressure on property-casualty insurers, Best cautioned, and the longer-term impacts of the COVID-19 pandemic are likely to influence the sector going forward.
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February 17, 2022
