Weiss: Insurance'03 Insolvencies Down 21.4 Pct.

NU Online News Service, Jan. 12, 3:05 p.m. EST?With the economy gaining momentum in 2003, the number of failed insurance companies dropped 21.4 percent last year, from 28 insurer insolvencies in 2002 to 22 in 2003, Weiss Ratings Inc. said.[@@]

Among the 22 insurer insolvencies reported last year, 18 were property-casualty, while four were life-and-health insurers. In comparison, three life-and-health insurers and 25 property-casualty companies had failed in 2002, noted the Jupiter, Fla.-based ratings agency. Among the largest p-c insurer insolvencies reported in 2003 were Republic Western Insurance Co. in Phoenix, Ariz., and Reciprocal of America in Glen Allen, Va., according to Weiss.

Weiss warned in its report that despite the year-over-year decline in insolvencies seen in 2003, the downward trend may not continue in 2004. "Now that the property-casualty industry has arguably reached the peak of a hard market, premium increases are expected to slow, driving underwriting earnings down and, potentially, the number of insolvencies up," said Melissa Gannon, vice president of Weiss Ratings Inc.

One positive development, though, is the upswing in the securities market, which should "reduce the impact of the soft market," Ms. Gannon forecast.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.