A new report from Fitch Ratings backs up what many industry experts have reported—2001 was a bad year for the P/C industry, noting an after-tax loss for the first time in history. Fitch, however, sees improved underwriting performance for 2002.
Positively, conditions are set for improved results in 2002 as the pricing environment continues to harden appreciably and policy coverage terms and conditions become more restrictive. Fitch feels that the combination of uncertain investment returns thrown together with the poor operating performance in recent years puts the industry in a ‘no choice’ position that forces the industry to abandon the unsuccessful pricing and underwriting practices of recent years.
Fitch concludes that favorable pricing and underwriting trends will likely need to continue for a number of years in order for the industry to produce an operating result that corresponds to an adequate return on capital.
A full copy of this new report titled ‘U.S. Property/Casualty Insurers Year-End 2001 results’ is available within Fitch’s Web-site at www.fitchratings.com.
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