Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Property/casualty insurers withstand tough economy

Reprints

Although property/casualty insurers suffered sharp declines in net asset values resulting from weak investment conditions and other difficulties in the financial markets, they have been affected to a lesser degree than other sectors, says Standard & Poor's Corp. in a special report.

“Moreover, it is our view that the P/C sector remains financially strong and is relatively well positioned to handle any future investment volatility,” said the report, issued Thursday by New York-based S&P.

“Property/Casualty Insurers Maintain Financial Strength Despite a Weak Economy” said the main factor property/casualty insurers consider when developing their investment strategies is maintaining enough liquidity to pay claims.

“This usually results in a more conservative profile with higher-quality and shorter-duration investments,” said the report.

“The asset portfolios of most P/C insurers are risk-averse and tend to be weighted in high-quality, investment-grade municipal, government, and corporate fixed income tables,” it said.

The report noted that during the recent financial turmoil, many property/casualty insurers lowered their exposures to equities, alternatives “and other asset classes that could be more volatile.”

While some property/casualty insurers have broad exposure to lower-rated or longer-duration investments, including residential and commercial mortgage-backed securities, “our analysis suggests that holdings are modest compared with total invested assets and policyholders' surplus,” the report said.

Copies of the report are available to S&P's Global Credit Portal subscribers at www.globalcreditportal.com and to its RatingsDirect subscribers at www.ratingsdirect.com. Nonsubscribers can obtain a copy for $500 by calling (212) 438-7280 or by sending an e-mail to research_request@standardandpoors.com.