Personal lines underwriting losses rose in 2017 for the fourth year in a row, Fitch Ratings found in a new report. There’s a twist, however.
In the three years prior to 2017, personal automobile insurance contributed largely to underwriting losses. It is showing some improvement now, but homeowners insurance is now a major loss ingredient for the sector.
‘The homeowners line is traditionally a more volatile product segment, which experienced a higher combined ratio than personal auto for the first time since 2012,” said Managing Director James Auden.
According to Fitch, industry statutory personal lines combined ratios rose to 103.8 in 2017, even as written premiums continued to grow. Higher catastrophe losses are largely to blame for the losses, while growing auto insurance losses were the cause in the previous three years.
Other findings from the Fitch report:
For 2018, Fitch expects auto insurance to get close to a 100 combined ratio and homeowners to improve, assuming there are no large catastrophe losses as in 2017.
Fitch said its sector outlook for the U.S. personal lines sector remains negative, though the rating outlook for most personal lines writers is stable.
Source: Fitch Ratings