Seven Straight Years of Reserve Releases
Property/casualty industry prior-year loss reserves have developed favorably for seven straight calendar years, according to a report from Fitch Ratings, which also said the industry’s reserve position remains adequate overall. Only the product liability, workers’ compensation, commercial automobile liability and commercial multiple peril lines have shown signs of deficiency based on Fitch’s analysis of year-end 2012 reserve levels.
Fitch Ratings found the industry reserve position to be adequate at year-end 2012, and noted that prior-year takedowns have continued for seven consecutive years.
Only the product liability, workers’ compensation, commercial automobile liability and commercial multiple peril lines have shown signs of deficiency based on Fitch’s analysis of year-end 2012 reserve levels.
For all lines taken together, reserve takedowns for accident-year 2011 and prior during calendar-year 2012 shaved 2.3 points off the calendar-year 2012 industry loss ratio. During calendar-year 2011, the comparable figure was 3.0 points. Both measures exclude the effects of losses emerging from mortgage and credit crisis-related claims in the mortgage and financial guaranty lines.
Read More: Seven Straight Years of Reserve Releases: Fitch.
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