A.M. Best said the U.S. commercial and personal lines insurance markets outlook is stable, despite the ongoing soft market cycle and economic crisis.
The Oldwick, N.J.-based rating service said the personal lines market rating action maintains its previous outlook, noting that rating actions are not expected "to move profoundly in one direction." The number of upgrades and downgrades are expected to remain balanced throughout the year.
Best noted that the segment maintains favorable risk-adjusted capitalization despite unprecedented catastrophic activity in 2008.
Because of the ongoing economic crisis affecting company investment portfolios, the soft market conditions are expected to subside. A material change or deterioration in capitalization would engender a revision in the outlook, Best said.
On the commercial side, the soft market is expected to continue through 2009, but the softening is expected to slow and flatten for most lines of business.
The segment is expected to maintain "adequate balance sheet strength, profitability and liquidity" through the year, Best said.
"With a modest semblance of stability, price levels continue to support reasonable profitability," Best concluded.
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