Fitch has revised its sector outlook on the U.S. property/casualty insurance industry to stable from negative for both the commercial lines and personal lines sectors. A stable outlook for the sector indicates that Fitch believes a vast majority of insurer ratings will be affirmed as they are reviewed over the next 12-18 months.
The change in outlook reflects Fitch’s view that the industry withstood the recent financial crisis reasonably well, particularly in comparison with other financial services sectors. While the property/casualty market suffered material reductions in capital in 2008, insurers benefited from the investment market recovery in 2009, which, coupled with improvements in underwriting performance promoted a return to previous strong capital levels. The industry has also experienced a shift toward material net unrealized gains in investment portfolios for many insurers.
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