August 28, 2017 / 6:27 PM / a year ago

Fitch: P/C Insurer First-Half 2017 GAAP Performance Stable

(The following statement was released by the rating agency) Link to Fitch Ratings' Report: North American Property/Casualty Insurers’ Midyear 2017 Results here CHICAGO, August 28 (Fitch) Fitch Ratings has compiled mid-year GAAP financial results for a group of 52 property/casualty (P/C) (re)insurers that are publicly traded or report GAAP consolidated results in a newly released Special Report, "North American Property/Casualty Insurers' Midyear 2017 Results". Operating ROE in the first half of 2017 (1H17) was mostly flat, declining to 6.9% from 7.0% in the prior year, reflective of poorer underwriting results offset by a modest improvement in investment income. "Calendar-year underwriting results were affected by modest underlying loss-ratio deterioration and reduced benefits derived from favorable prior-year reserve development, offset by decreased catastrophe losses, as the group combined ratio increased to 1 pp to 96.6%, up from the prior year," said Chris Grimes, Director, Fitch Ratings. Group common shareholders' equity grew by 4.3% in 1H17, up to $667 million, as strong earnings and $14.7 billion of unrealized investment gains were seen across the group of companies. Growth in shareholders' equity was tempered by companies actively managing their capital in 1H17, as $15 billion was returned to shareholders in 1H17. Insured catastrophe losses for the aggregate group decreased by nearly 10% in 1H17 to $7 billion as severe storm losses had a more modest impact on results. Cat losses increased the group's combined ratio by 3.9% in 1H17, down from 4.7% in the prior year. However, regionals and personal lines insurers retained the bulk of their reported gross losses and experienced the largest earnings impact from 1H17 catastrophe losses, as cats represented 7.7% and 7.2% of earned premium for the two segments, respectively. Fitch maintains a Stable Rating Outlook for each of the sectors covered in this report (U.S. commercial, U.S. personal, and global reinsurance). Broad-based rating changes are unlikely in the next 12-24 months. Personal and commercial lines have stable sector outlooks, while the reinsurance sector's outlook is negative, as intense market competition and sluggish cedent demand have resulted in a soft reinsurance capacity. "On balance the sector credit metrics are consistent with Fitch ratings for individual companies," added Grimes. The full report, 'North American Property/Casualty Insurers' Midyear 2017 Results,' is available at or by clicking on the link. Contact: Christopher A. 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