Property/casualty industry faces economic, regulatory challenges in '13
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Slow economic growth and evolving regulatory frameworks will prove challenging to the property and casualty insurance industry in 2013, according to a report released Monday by Moody's Investors Service Inc.
Moody's said, however, that property/casualty insurers are better placed than life insurers to withstand an environment of slow economic growth, as some of their products are mandatory for buyers and certain property/casualty risks are uncorrelated with economic conditions.
In addition, the rating agency said, property/casualty insurers are increasing rates for some lines of business.
Superstorm Sandy will dominate fourth quarter 2012 earnings reports by property/casualty insurers with U.S. exposures, and some insurers covering commercial and industrial risks could lose up to two quarters' worth of earnings, Moody's said.
The risk management approach of regulatory regimes, such as the upcoming Solvency II rules in Europe generally is positive for insurers, but those frameworks still are under construction, Moody's noted.
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