Earnings and revenues for U.S. insurance brokers are likely toimprove modestly in 2016 in relation to levels reported throughnine months of 2015, according to Fitch Ratings' 2016 U.S.Insurance Broker Outlook report, which was released today.

|

Fitch expects near-term operating performance and balance sheetstrength to remain supportive of a stable credit ratings outlookfor the brokers in the company’s ratings universe.

|

Related: A look ahead: What 2016 will bring for the P&Cindustry

|

The New York-based ratings agency said it sees limited potentialfor rating changes over the next 12 to 18 months, despiteanticipating modest improvement in some credit fundamentals in2016. Willis Group Holdings PLC, which is on Rating Watch Positivebecause of the proposed merger with Towers Watson & Co., is anexception. Fitch said that the merger faces closing uncertaintytied to gaining Towers Watson shareholder approval.

|

The sector outlook is stable as debt-servicing capabilities areexpected to remain steady, Fitch said. A soft reinsurance marketwith flat or declining premium rate changes in primary commercialinsurance segments will put pressure on brokers' organic growth andprofit margins in 2016. However, global brokers' revenues fromdiverse geographic areas and products, including healthcare andbenefits consulting, should help offset this. Strong retention andinsured exposure growth from a slowly improving economicenvironment will also promote revenue expansion, Fitch said.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
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.