Fitch Ratings said in a recent report that the sector outlook for London market insurance remains negative in 2018, reflecting its analysts’ expectation that underwriting results will continue to be pressured by the high cost of doing business, due to high acquisition and administration costs.
The trend of rising expense ratios since 2012 was halted last year, with expense ratios remaining high, at above 40 percent, but broadly flat year-on-year for most London market insurers.
Fitch says that majority of London market insurers reported underwriting losses in 2017, driven by their exposure to significant catastrophe losses in 2017. It was one of the costliest years on record for major claims after a series of catastrophe events, including three major hurricanes – Harvey, Irma and Maria – and earthquakes in Mexico and wildfires in California. Despite these losses, risk-adjusted rates at January renewals improved only slightly and remain well below historical highs.
The report is “London Market Insurance Dashboard – 2017 Results.”
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