Filed Under:Markets, Commercial Lines

Reserve Releases Up for U.S. Personal and Commercial Lines Companies in 2011

NU Online News Service, March 23, 3:05 p.m. EDT

Reserve releases were higher in 2011 than in 2010 and 2009 for personal- and commercial-lines companies followed by ALIRT Insurance Research, shaving 2.4 points off of those companies’ 2011 combined ratio, the firm notes.

The ALIRT P&C Composite consists of the 50 largest U.S. insurers, according to the firm.

SEE SLIDESHOW: From Underwriting Results to Reserve Releases, ALIRT Charts Wrap Up 2011

ALIRT says, “Favorable prior-year reserve development was declining as the soft market dragged on, but reserve releases were again quite large in 2011.”

A separate analysis released by Stifel Nicolaus states that statutory loss-reserve development declined from 2010 to 2011 by about 14 percent, excluding activity at AIG. 

A chart released by ALIRT shows the companies it followed reported about $5.5 billion in favorable development in 2011well over 2010, which saw less than $2.5 billion in favorable development, and 2009, which saw less than $4 billion. In 2008, the ALIRT Composite reported just under $6 billion in favorable development.

This helped lower the combined ratio in 2011 by the most points since 2008, when reserve releases shaved 2.5 points from the ALIRT Composite combined ratio.

David Paul, a principal at ALIRT, says four of the Top 10 reserve releases for the year came from personal-lines companies. For personal lines, in particular, Paul says many of the reserves released were from recent years.

But he adds that there were still big releases for the years 2007 and 2008 among companies in the ALIRT Composite. He notes that while much of the talk around the industry points to prior-year reserves being exhausted, “we’re not seeing that yet.”

Despite the favorable impact of the reserve releases, the ALIRT Composite reported a 2011 combined ratio of 107.1, due mainly to catastrophe losses, ALIRT says.

Top Story

RIMS 2015 opens with a rockin' good time at Mardi Gras World

RIMS 2015 in New Orleans kicked off with an opening reception at Mardi Gras World, where attendees networked over good food and rocking entertainment.

Top Story

Here is your 6-step hurricane season checklist for 2015

The Atlantic Hurricane season runs from June 1st through November 30th. Are you ready? Are your clients?

More Resources

Comments

eNewsletter Sign Up

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Mobile Phone
         

Advertisement. Closing in 15 seconds.