Sept 11 (The following statement was released by the rating agency)
Fitch Ratings has published a new report that examines statutory financial performance for
the U.S. property/casualty insurance industry and 20 of the largest market participants over the
five-year period 2008-2012.
Statutory operating performance during this period was relatively weak compared
to historical industry norms despite improved results in 2012. In general, soft
market pricing conditions, large catastrophe losses and the 2008-2009 economic
recession all contributed to a challenging operating environment over the study
The new report analyzes companies and the industry versus five unique measures
that consider: underwriting performance, net profit margin, cash flow, return on
capital, and internal capital formation. Companies are ranked by each operating
ratio and in addition, an aggregate weighting of the ratios provides a
comprehensive ranking of operating performance.
Rating analyses benefits from a comparison of longer term performance for an
individual insurer versus the industry. The most successful underwriters tend
to report solid results above peer averages in any market conditions. Chubb,
Progressive, and Travelers reported the strongest performance over the period
similar to their position in Fitch's past studies
Large mutual insurers gravitated toward the weaker performing underwriters over
the most recent five-year period given a reduced focus on high profitability and
less levered balance sheets. Although Fitch expects further improvement in
profitability during 2013, shifts from lower tier performers to top tier
performers are infrequent.
The report 'Statutory Performance Rankings (2008-2012)' is available on the
Fitch web site at 'www.fitchratings.com.'