A.M. Best: P/C Insurer Impairments Down in 2012

June 25, 2013

Financial impairments in the property/casualty insurance industry fell more in line with recent trends and historical levels in 2012, following a sharp spike in 2011. There were 21 P/C impairments in 2012, a sizable decrease from the 34 reported for 2011 by A.M. Best Co. a year ago.

A.M. Best said the 2012 experience is below the P/C historical average impairment count of 25.8. It also is in stark contrast to the life/health industry’s two financial impairments in 2012, its lowest in 50 years.

So far, four P/C impairments have been reported for 2013, according to A.M. Best.

The P/C industry’s 2012 financial impairment frequency (FIF), which A.M. Best says is a more accurate indicator of impairment trends than a mere count, was 0.69 percent, below the industry’s historical average of 0.82. The 2012 figure was roughly in line with the levels reported from 2008-2010, before the weak U.S. economy and troubled real estate industry drove the 2011 FIF to 1.11 percent. The storm appeared to pass for the mortgage guaranty sector in 2012, with no impairments in that line of business, compared with eight in 2011, A.M. Best said.

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