Best's Market Segment Report: AM Best Maintains U.S. Personal Lines Insurance Market Outlook at Stable
AM Best has maintained a market segment outlook of stable on the U.S. personal lines industry for 2020, citing a significant decline in catastrophe activity, profitable underwriting performance in the private passenger auto segment and the sector's overall strong risk-adjusted capitalization levels.
A new Best's Market Segment Report, titled, "Market Segment Outlook: U.S. Personal Lines," states that following record-breaking catastrophe activity in 2017 and above-average storm losses in 2018, the personal lines industry had a breather in 2019 despite threats from numerous storms. Notably, the decline in catastrophe activity has benefited the homeowners segment. Underwriting actions taken by management teams-through enhanced pricing segmentation, rate increases to match risks and overall improved exposure and concentration management-have also better positioned the segment for continued success.
Results for the private passenger auto segment continue to benefit from a stabilization in loss cost trends and underwriting initiatives focused on rate adequacy. While ongoing severity trends are likely to remain elevated given medical severity and high costs for auto repairs, the reduction in frequency has resulted in a general flattening of rates. This could be short-lived, however, as frequency patterns can change quickly.
The report outlines other factors that are driving the stable market segment outlook, including:
To view a video with AM Best Director Michelle Baurkot about the U.S. personal lines outlook, please visit http://www.ambest.com/v.asp?v=outlookpersonallines1219.
AM Best is a global credit rating agency, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2019 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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