S&P: P/C Stable But “Something Has to Give”
According to a new report by S&P Global Ratings, insurers will face the real test in 2018 if catastrophe losses come close to last year's activity and if reserve development becomes unfavorable. According to a new report by S&P, the lack of Category 3 or higher hurricanes over a 12-year span and cheap reinsurance have led to pricing complacency, particularly in commercial property. “After a prolonged period of pricing complacency leading to rate inadequacy in many product lines, something has got to give in 2018,” said S&P Global Ratings credit analyst Tracy Dolin.
S&P says that the industry is stable but somewhat in a state of flux, and it may take time to fully grasp the extent of 2017 catastrophe losses, “given the $20 billion-$40 billion gap between the amounts reported by companies so far and consensus estimates of total losses among industry participants.”