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North American Insurance Conference: Managing Change in an Evolving Insurance Industry

November 19, 2019 from 8:30am – 12pm

Hearst Tower - 300 West 57th Street, New York

Please join us for our annual North American Insurance Conference, where Fitch Ratings’ analysts will partner with external thought leaders to assess the current and future risks and opportunities facing the Insurance sector

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Excess & Surplus Lines Premium Growth Accelerates in Response to Weaker Results

Direct written premiums in the U.S. excess and surplus (E&S) lines market for 2018 grew at the greatest rate since 2012, increasing 11%, according to Fitch Ratings. The trend continued to strengthen in the first-half of 2019 with premium growth of 15%, a rate nearly double the overall property/casualty market's growth rate.

D&O Liability Market Pricing Increases as Tort Environment Shifts

Underwriting conditions in the U.S. commercial lines insurance market have improved significantly in many segments in 2019, including directors and officers (D&O) liability. Several years of weaker performance driven by flat premium growth and less favorable claims trends in a shifting tort environment, has spurred movement by carriers to restore profitability in this challenging line.

Japanese Non-Life Insurers' Financial Strength Likely Unaffected by Typhoon Faxai Losses

Nikkei news reported that the gross insured loss of Japan's top four non-life insurers could reach several hundred billion yen, although the insured loss is likely to be smaller than that caused by Typhoon Jebi in 2018.

Global Reinsurance Guide 2020

Our 10th edition of the Global Reinsurance Guide 2020, providing reinsurance brokers, security committees and reinsurance investors with the agency’s latest research and views on the global reinsurance sector is available. 

Download Now

Medical Liability Monitor

MPL Insurance Market Slowly Reacting to Poorer Profits (PDF)

In the article Fitch analysts discuss that the U.S. medical professional liability insurance market has posted underwriting losses for the last three consecutive years, and is now gradually responding with premium rate increases.  Fitch has questions whether the industry will take sufficient pricing and underwriting actions to restore profits, given competitive pressures and potential for less favorable claims trends. Download Now

Hong Kong-Listed Chinese Life Insurers' 1H19 Profit Rises; Solvency Resilient

The operating profit of the six companies, which have their own listings or are part of a listed group, improved significantly in 1H19 from a year earlier, largely driven by the recovery of the A-share market in China.

Taiwan Life Insurers to Accelerate Capital Top-Ups, Product Shifts

These changes are likely to have a positive impact on the credit profile of the industry in terms of lower asset leverage (or higher net worth ratio), stronger capitalisation and more robust business profiles.

Introducing our ESG Heat Map

Fitch Ratings has launched an ESG Heat Map covering 29 different sub-sectors for Financial Institutions to provide further insight into the relevance of ESG factors to credit ratings. The map is designed to help users understand how relevant individual ESG topics are to credit ratings across different sectors.

North American P/C Insurers See Steady Results at Mid-Year 2019

Higher investment income and modestly weaker calendar-year underwriting margins kept operating performance for North American property/casualty (P/C) insurers steady during 1H19, according to a new report by Fitch Ratings. Compiling GAAP midyear results for a group of 47 companies reveals a six months aggregate combined ratio of 94.7% relatively unchanged from 94.3% for the same period in 2018. 

Commercial Auto Insurance Underwriting Losses to Continue in 2019

U.S. property/casualty (p/c) insurers continue to face substantial underwriting losses on commercial automobile insurance, according to Fitch Ratings in a new special report. Following a statutory combined ratio of 108% in 2018, the segment is poised for a ninth consecutive year of underwriting losses in 2019, with only moderate results improvement anticipated.

Major Korean Insurers' Earnings May Remain Under Pressure

Their solvency position, measured by the local risk-based capital (RBC) ratio of the major life and non-life insurers, improved to about 320% and 286% by end-June 2019 (end-2018: 286% and 266%), respectively, on an aggregate basis.

Bermuda Treatment of Tier 3 Capital for (Re)Insurers Raises Questions

The Bermuda market continues to evolve with government efforts to maintain relevance and attractiveness as a (re)insurance domicile in a highly competitive global market.

Risk Management Key in Indonesia Credit Insurance Expansion

We believe credit insurance will continue to outgrow the overall insurance market as more banks and other financial institutions get familiar with, and benefit from, the credit insurance products.

Revised Expense Rules to Have Limited Impact on Korean Insurers

Korea's Financial Services Commission announced a comprehensive policy revision related to expenses of insurance companies, including the commissions paid to the agency channel, on 1 August 2019.

Auto Premium Hike to Support Japanese Non-Life Insurer Profits

A consumption tax hike from October 2019 will hurt non-life insurers' earnings by pushing up incurred losses, as auto and other repair costs as well as agency costs are taxable. Furthermore, a cut in the statutory interest rate associated with amendments to the civil code in April 2020 will increase insurance claim costs.

Asian Reinsurers Review Strategies amid High Competition

Reinsurance pricing was largely stable in Asia, except for areas where severe catastrophes occurred in 2018. The stability was due mainly to adequate capacity from traditional reinsurers and some access to alternative capital markets, such as insurance-linked securities (ILS).

U.S. Workers Comp On Track for Fifth Consecutive Year of Underwriting Profit

The U.S. workers compensation market is on track for a fifth consecutive year of underwriting profits in 2019 despite recent weakening in market fundamentals, according to Fitch Ratings. The industry's statutory combined ratio fell to 86% in 2018, and has averaged 93% annually since 2015. 

US Life Insurers' Mortgage Update

July 23, 2019 at 11:00am EDT

U.S. life insurers' exposure to mortgages increased to nearly 13% of invested assets at YE 2018, up from 12.4% the year prior and above historical allocations of 8%-12%. The incremental increase in the average mortgage loan allocation is a continuation of an industrywide trend.
Website: Insurance Landing Page

Douglas Meyer, Managing Director, North American Insurance
Robert Vrchota, Managing Director, North American CMBS
Nelson Ma, Director, North American Insurance

New Ogden Rate a Small One-Off Negative for UK Motor Insurers

The lower-than-expected Ogden discount rate announced today by the UK government is a small one-off negative for the country's motor insurers. It will mean slightly higher payouts on bodily injury claims, forcing many insurers to increase their reserves for settling claims. This will cause a small hit to earnings, which we expect insurers to quantify when they announce their 1H19 results in August.

China's New Rules Unlikely to Increase Insurers' Appetite for Trust Products

The new rules explicitly stipulate that insurers cannot use their investments in trust products to circumvent regulations for other purposes. Credit enhancements such as guarantees need to be arranged if the underlying assets of trust products are non-standard credit assets.

Lifting of Foreign-Ownership Cap to Have Little Impact on China Life Insurers

The move will attract more international insurers to China to tap the fast-growing market, but Fitch believes the large domestic companies have strong business profiles and credit fundamentals to ward off the increased competition. In 2018, the 28 life insurers that have foreign shareholders together held only 8% of the life market's direct premiums.

Chinese Non-Life Insurers to Seek Capital on Slower Surplus Growth

Chinese non-life insurers, especially those with small scale of operation, volatile underwriting margin and high growth dynamics, are likely to seek fresh capital. The liberalisation of commercial motor insurance premium rates will limit insurers' ability to improve their margins, leading to slower surplus growth.

Japan's Life Insurers Look to Foreign Bonds due to Low Domestic Yields

Fitch expects Japanese life insurers to continue to increase their allocation to foreign fixed-income assets, including those denominated in US dollars as well as other foreign currencies, to boost yields. 

Japanese Non-life Insurers Well Capitalised Despite High Losses

Japan's three non-life groups - Tokio Marine Holdings, SOMPO Holdings and MS&AD Insurance Group Holdings - have maintained strong capital buffers despite record-high weather-related losses of JPY1.6 trillion in 2018, as the groups' diversified businesses tempered the poor performance of their domestic non-life segments at group level.

U.S. Personal Lines Profits Improve Led by Auto Insurance Segment

U.S. personal lines insurance saw strong premium growth of 8% in 2018, says Fitch Ratings. The sector's statutory combined ratio of 99% for 2018 represents the market's best results since 2013, according to a new special report from Fitch. 

Cyber Insurance Growth Slows, Market Remains Untested

The cyber insurance market remains a source of growth for U.S. property/casualty insurers; however, that growth is slowing. The industry's total direct written cyber premiums grew 8% in 2018 to $2 billion, down from 37% growth in 2017. 

Austrian Life Insurance Market to Shrink for a Fourth Year

Austria's life insurance sector faces a fourth successive year of declining premium income in 2019, even if it is less pronounced than in 2016-2018. Profitability will remain under pressure as insurers bolster provisions amid low investment returns. In contrast, the non-life sector is relatively profitable and growing steadily.

US P/C Industry 2018 Performance Improves on Return to Underwriting Profit

The U.S. property/casualty (P/C) industry returned to a modest statutory underwriting profit in 2018 following two consecutive years of combined ratios above 100% as catastrophe losses slowed, premium growth accelerated and results were favorable in several key product segments.

Insurance Broker Performance Trends Promote Ratings Stability

Profit fundamentals remain favorable and supportive of current rating levels for U.S. insurance brokers in Fitch Ratings' universe, namely: Marsh & McLennan Companies, Inc. (MMC), Aon Plc (AON) and Willis Towers Watson, plc (WLTW)

UK Insurers Unlikely to Get Profit Boost From Fraud Reduction

UK non-life insurers will probably not get a profit boost despite a likely reduction in fraudulent insurance claims. We expect insurers to use the savings stemming from tighter regulation of claims management companies to keep premium rates down rather than to increase profit margins, as the market is highly price-sensitive.

London Market Insurers' Results Hit by Cat Losses and Investment Returns

Underlying profitability was hit by natural catastrophe losses, as reflected in Lloyd's of London reporting a combined ratio of 105% in 2018 (2017: 114%). However, some London market insurers, such as Beazley and Hiscox, were still able to report underwriting profits thanks to their non-catastrophe-exposed specialty lines. 

US Drug Prices Unlikely to Hurt Insurer/Supply Chain Margins

Changes currently being proposed concerning prescription drug rebates and pricing under Medicare/Medicaid are not expected to materially pressure margins or profits over the long term for US health insurers, drug companies, distributors and PBMs (pharmacy benefit managers).

UK Bulk Annuity Market Benefits From Strong Demand, Regulation

UK life insurers that write bulk purchase annuities (BPAs) continue to benefit from strong demand, with sales of BPAs this year likely to surpass last year's GBP24 billion, the highest yet.

Rating Action

Fitch Upgrades Sumitomo Life to 'A+'; Outlook Stable

Fitch has also affirmed the rating on its subordinated debt at 'A-'. The Under Criteria Observation status on the ratings has also been removed.


Also see these rating actions:

ESG Risks Limited For US Non-Life (Re)insurance Ratings

For US non-life companies, environmental issues can be particularly relevant given a significant number of individual carriers' underwriting exposure to natural catastrophe risk and latent asbestos and environmental losses. 



Keith Buckley

Analytical Group Head

+1 312 368 3211


Jeff Liew


+852 2263 9939


Harish Gohil


+44 20 3530 1257


Eduardo Recinos


+503 2516 6606

North America

Julie Burke


+1 312 368 3158


David Turner

Business Relationship Head

+44 203 530 1442


Mee Ryung Song


+822 3278 8364


Diego Alcazar


+1 212 908-0396

North America

Brad Istwan


+1 312 368 3197

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