In a new report, Fitch Ratings discusses the current state of the U.S. auto insurance market and expectations for the near future.
The report notes that although U.S. auto insurers have experienced strong underwriting results over the past five years, market fundamentals have deteriorated recently. Fitch believes that heightened market competition has weakened pricing over the last several years, which will lead to deteriorating results for the market in 2008 and inadequate returns on capital for the line overall.
Additionally, economic and financial market woes that have afflicted other financial services industry sectors are now impacting property/casualty insurers, which was a key consideration in Fitch Ratings’ recent change in the Rating Outlook to Negative from Stable for the U.S. property/casualty insurance personal and commercial lines sectors.
The full report titled ‘Auto Insurance Market: Investment Challenges Outweigh Soft Market Concerns’ is now available on the Fitch Ratings web site at www.fitchratings.com under Financial Institutions then Insurance then Special Reports.
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