North American insurers’ financial strength continues to be strong as the industry enters 2019, and that status should remain stable through the year, S&P Global Ratings said in a new report.

“Entering 2019, North American insurers’ financial strength remains strong with broadly stable rating outlooks that reflect our expectation for limited rating change over the next 12 months,” S&P Global Ratings credit analyst Joseph Marinucci said in prepared remarks.

Overall, the average financial strength rating for the insurance portfolio continues to hover around the upper half of the strong (A) category, Standard & Poor’s said. Rating activity in the previous year was affirmation-oriented, with some modest net upside movement driven mostly by fundamental factors, merger and acquisition (M&A) activity, and group status changes.

Balance-sheet strength remains a pillar of credit-quality support for the portfolio, providing a measure of protection from risks related to economic downturn and the expansion or increase in the magnitude of specific current and emerging subsector challenges more specifically.

Standard & Poor’s said it remained concerned about a number of areas heading into 2019, including pricing adequacy, profitability, M&A, disciplined growth, regulation, policy risk and the potential for slower economic development.

The full report is “As 2019 Begins, North American Insurers’ Strength and Stability Shows in Their Credit Quality.”

Source: Standard & Poor’s

Topics Carriers