A.M. Best Raises C/L Outlook to Stable
For the first time in seven years, A.M. Best has boosted its outlook on the commercial lines segment of the U.S. property/casualty industry, to stable from negative for 2018.
A.M. Best said the outlook has improved due “an embedded change in the sophistication of the segment’s pricing and underwriting infrastructure and the segment’s resilience amid a variety of macroeconomic and insurance market issues in recent years.” Catastrophe losses nearly doubled compared with 2016; however, through early fourth-quarter 2017, “they generally were within companies’ risk tolerances and the retentions of their catastrophe programs, reflecting the appropriateness of the segment’s enterprise risk management.”
The Best’s Briefing, titled, “Market Segment Outlook: U.S. Commercial Lines,” notes that while the pricing environment remains challenging and other headwinds persist, most companies in the segment have adopted tools that allow for greater insight into business profitability. A.M. Best, which has had a negative outlook on the commercial lines segment since the start of 2011, expects the segment to post an underwriting loss for 2017, but still record net profits, driven primarily by investment results.