All but three insurers reduced leverage in 2024, with the most notable reductions coming from AIG, Liberty Mutual and Progressive. (Credit: Montri Thipsorn/Adobe Stock)
Financial leverage in P&C insurance is expected to remain relatively low in 2025, Fitch Ratings reports, thanks to elevated interest rates and limited pressure from upcoming maturities.
Fitch’s most recent report on the industry found that the aggregate financial leverage ratio (FLR) for the group of 33 North American P&C re-insurers included in its research improved to 17% at the end of 2024. The FLR calculation mainly includes unrealized losses on fixed-income investments. Overall, trends remained consistent with all but four of the insurers reducing leverage last year.
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