Moody's: More P-C Downgrades May Be Coming
NU Online News Service, Jan. 3, 3:53 p.m. EST
Sarah Hibler, senior credit officer at Moody's and the main author of the new report, warned that there could be further downgrades in the sector if prior-accident reserves develop worse than Moody's current expectations, or if the profitability of businesses currently written turns out to be lower than expected.
According to Moody's new study on the top 50 p-c companies, "the lion's share of the reserve deficiency" is in commercial-lines carriers as well as a number of diversified companies and reinsurers. The New York-based rating agency also observed that the lines of business with largest reserve deficiencies include workers' compensation, medical malpractice, commercial multi-peril and general liability insurance, as well as excess-of-loss liability reinsurance.
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