Personal-lines insurers should show year-over-year profit improvement when they report 2013 results, and the combined ratio for both personal auto and homeowners should come in under 100, according to a Fitch Ratings personal-lines dashboard update.

Fitch expects personal auto and homeowners to report a combined ratio of 99, with the homeowners line showing greater yearly profitability improvements due to lower catastrophes. Regarding the expected improved underwriting results for both lines, Fitch says, “This performance is tied largely to benefits from successive rounds of renewal price increases.”

However, while the ratings agency says it expects rate increases to continue in 2014, the momentum is expected to wane throughout the year.

Loss-cost trends though, are expected to remain “relatively steady,” leading Fitch to say that pricing should continue to outpace loss trends, at least through the first half of the year.

Results for individual personal-lines insurers will vary, Fitch says, noting that companies show “wide levels of underwriting success in personal lines.” The ratings agency notes that Progressive and Geico have the lowest five-year average statutory combined ratios from 2008-2012, followed by Chubb. At the other end of the spectrum, Fitch says State Farm, Nationwide and American Family have the highest personal-lines combined ratios over that time.

State Farm remains the market-share leader in both personal auto (18% of the market) and homeowners (22% of the market). Fitch notes that Geico surpassed Allstate as the second-largest writer in personal auto by market share. Allstate remains the second-largest homeowners writer.

Special Reports /

Fitch: Personal Lines Rate Increases to Moderate, but Stay Ahead of Loss Trends

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