Moody’s provides stable outlook for US P&C in 2021

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Moody’s has has provided a stable outlook for the US Property & Casualty commercial insurance sector in 2021.

Moody'sAnalysts highlight an acceleration in price increases and solid capital positions.

However these factors could be mitigated by headwinds from loss cost trends, catastrophes and coronavirus related losses

“For commercial lines insurers, the coronavirus-related economic downturn is constraining premium growth, raising claim costs in certain business lines, and adding volatility to investment performance and capital levels,” Moody’s Vice President Jasper Cooper said.

“While the economic recovery is underway, our macro forecast underscores the downside risks. In addition, low interest rates are likely to persist for an extended period of time, reducing insurers’ investment income and weighing on profitability.”

Commercial insurance pricing was rising even before the onset of the coronavirus pandemic except in workers’ compensation, Moody’s notes.

Through the first nine months of 2020, commercial insurers have reported significant pricing gains, particularly in general liability, commercial property, professional liability, and commercial auto.

As rate adequacy improves, Moody’s says some insurers are pursuing growth while others continue to re-underwrite their portfolios. Premium growth rates will also depend on the pace and extent of the economic recovery.

Lastly, US commercial property insurers experienced significant catastrophe losses through the third quarter of 2020, primarily from hurricanes, western US wildfires, and hail and other convective storms.

Moody’s adds that commercial property insurers are raising rates in response to the high frequency and severity of catastrophic events and rising reinsurance costs.

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The post Moody’s provides stable outlook for US P&C in 2021 appeared first on ReinsuranceNe.ws.

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