Insurers Likely to Maintain Capital in 2012, Rather Than Return It to Shareholders

Despite many insurers suffering operating losses in 2011, excess capital remains throughout the industry—and analyst firm Keefe, Bruyette & Woods (KBW) says it’s likely that insurers will maintain that capital for 2012 growth opportunities rather than return it to shareholders. 

In its latest “P&C Monthly Deductible” report, KBW says more than one-third of the insurers it covers reported operating losses for 2011. However, total capital declined by just 0.5 percent to $232.2 billion at Q4 2011 compared to 2010’s fourth quarter.