Citing an unusually high number of catastrophic weather events last year, ratings agency A.M. Best reports that the U.S. property/casualty industry reported its largest underwriting loss since 2006. The industry’s combined ratio is expected to deteriorate 6.5 points to 107.5 for 2011 from 101.0 in 2010. (Combined ratio equals expenses and losses divided by premiums; a value greater than 100% means the company is paying out more than it’s taking in.)
What might this portend for insurance consumers? Briefly, we should expect to see many carriers applying to state insurance commissioners for approval to increase rates in those areas and for the lines of business where losses have been most significant. Also expect to see carriers become much more selective in their efforts to underwrite new risks, and more aggressive in their efforts to non-renew existing policyholders with profiles determined to be prone to loss. I sure wish the news was better…..
For more details: http://www.insurancejournal.com/news/national/2012/02/06/234256.htm