Latest news with #JasonHopper
Business Wire
24-04-2025
- Business
- Business Wire
Best's Special Report: Secondary Perils Continue to Spike Insurer Loss Ratios, Even in Less Catastrophe-Prone States
BUSINESS WIRE)-- AM Best data shows that nearly half of all U.S. states saw its highest single-year property catastrophe loss ratio in the last 10 years exceed its 10-year median loss ratio by more than 20 percentage points. While many of these states are prone to catastrophe losses, according to a new AM Best report, the rising frequency of secondary perils in states considered to be less-catastrophe prone have led insurers to ramp up reassessments of their pricing models, underwriting strategies and risk management approaches. The rising frequency of secondary perils in states considered to be less-catastrophe prone have led insurers to ramp up reassessments of their pricing models, underwriting strategies and risk management approaches. Share Secondary perils have become a major cause of loss in the past five years for U.S. property/casualty insurers with property catastrophe-exposed lines of business, highlighted by the January wildfires in California. In its Best's Special Report, 'US Weather Event Risks Highlight Need for Stress Testing,' AM Best states that insurers will need to stress test for these threats regularly as risk profiles evolve. Stress tests are conducted and factored in AM Best's credit rating process, as part of the balance sheet and enterprise risk management assessments. 'Stress testing should consider risk appetite and tolerance, as well as net exposure, the impact from multiple events, liquidity and reinsurance structure and dependence,' said Jason Hopper, associate director, Industry Research and Analytics. 'Understanding true exposures and considering all plausible scenarios is important. With the availability of aggregate reinsurance protection limited, some carriers have been severely impacted by the aggregation effects of multiple, smaller events.' The report notes that there were 27 one-billion-dollar weather events in 2024, and 28 in 2023 (despite there being no NOAA-named hurricane), compared with an average of 15 events in 2010-2022. While national insurers have accounted for an overwhelming majority of direct losses paid, single-state and regional companies tend to have a greater share of claims compared with their premiums in some states, with Kentucky being the highest in 2023 at nearly 25% of direct losses paid in the state while having 18% in market share based on direct premiums. The greater share of claims than premiums indicates higher concentration risk for these carriers. 'Market disruptions continue as some of the national carriers curb their risk appetites, creating opportunities for single-state and regional writers,' said Jacob Conner, associate analyst, AM Best. 'However, the operating loss-drag on capital and surplus over the last 10 years has been worse for single-state and regional writers in catastrophe-prone states, and so stress testing helps companies determine the strength of the balance sheet and ability to absorb shocks.' To access the full copy of this special report, please visit
Yahoo
24-04-2025
- Business
- Yahoo
Best's Special Report: Secondary Perils Continue to Spike Insurer Loss Ratios, Even in Less Catastrophe-Prone States
OLDWICK, N.J., April 24, 2025--(BUSINESS WIRE)--AM Best data shows that nearly half of all U.S. states saw its highest single-year property catastrophe loss ratio in the last 10 years exceed its 10-year median loss ratio by more than 20 percentage points. While many of these states are prone to catastrophe losses, according to a new AM Best report, the rising frequency of secondary perils in states considered to be less-catastrophe prone have led insurers to ramp up reassessments of their pricing models, underwriting strategies and risk management approaches. Secondary perils have become a major cause of loss in the past five years for U.S. property/casualty insurers with property catastrophe-exposed lines of business, highlighted by the January wildfires in California. In its Best's Special Report, "US Weather Event Risks Highlight Need for Stress Testing," AM Best states that insurers will need to stress test for these threats regularly as risk profiles evolve. Stress tests are conducted and factored in AM Best's credit rating process, as part of the balance sheet and enterprise risk management assessments. "Stress testing should consider risk appetite and tolerance, as well as net exposure, the impact from multiple events, liquidity and reinsurance structure and dependence," said Jason Hopper, associate director, Industry Research and Analytics. "Understanding true exposures and considering all plausible scenarios is important. With the availability of aggregate reinsurance protection limited, some carriers have been severely impacted by the aggregation effects of multiple, smaller events." The report notes that there were 27 one-billion-dollar weather events in 2024, and 28 in 2023 (despite there being no NOAA-named hurricane), compared with an average of 15 events in 2010-2022. While national insurers have accounted for an overwhelming majority of direct losses paid, single-state and regional companies tend to have a greater share of claims compared with their premiums in some states, with Kentucky being the highest in 2023 at nearly 25% of direct losses paid in the state while having 18% in market share based on direct premiums. The greater share of claims than premiums indicates higher concentration risk for these carriers. "Market disruptions continue as some of the national carriers curb their risk appetites, creating opportunities for single-state and regional writers," said Jacob Conner, associate analyst, AM Best. "However, the operating loss-drag on capital and surplus over the last 10 years has been worse for single-state and regional writers in catastrophe-prone states, and so stress testing helps companies determine the strength of the balance sheet and ability to absorb shocks." To access the full copy of this special report, please visit AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED. View source version on Contacts Jason Hopper Associate Director, Industry Research and Analytics +1 908 882 1896 Jacob Conner Associate Analyst +1 908 882 2465 Christopher Sharkey Associate Director, Public Relations +1 908 882 2310 Al Slavin Senior Public Relations Specialist +1 908 882 2318 Sign in to access your portfolio
Associated Press
17-04-2025
- Business
- Associated Press
Best's Special Report: Implications of Business Profiles on Operating Performance
OLDWICK, N.J.--(BUSINESS WIRE)--Apr 17, 2025-- While an insurer's business profile has a foundational role in its earnings stability and surplus growth, concentration by line of business and geography can be key detriments to a respective company's profitability, according to a new report released by AM Best. In its new Best's Special Report, 'Implications of Business Profiles on Operating Performance,' AM Best notes that this concentration aspect is the greatest drag on its business profile assessments, which serve as a key building block in the rating process. Nearly 60% of AM Best-rated U.S. property/casualty (P/C) companies have a concentration sub-assessment of negative, with degree of competition (31%), market position (22%) and product risk (22%) following as less impactful factors. According to the report, there has been a shift in the risk profiles of individual states due to secondary perils, which have become a major cause of insured losses. 'Insurers operating in fewer states or with fewer lines may face greater challenges managing the financial impact of these perils than national insurers that can better diversify their risk,' said Jason Hopper, associate director, AM Best. Approximately 50% of AM Best-rated companies with a limited business profile have their largest concentration in California, New York, Florida and Texas. P/C companies domiciled in these four states accounted for nearly 35% of this segment's downgrades from 2021 through 2024. Concentrations, whether by product or geographic, can lead to heightened climate risk, event risk, limited flexibility, earnings volatility, capital pressure and regulatory risk. However, the report also notes that higher business profile assessments generally correlate with stronger operating performance assessments, demonstrated by a gradual decline in return on revenue and higher volatility in results as business profile assessments worsen. To access a complimentary copy of this special report, please visit © 2025 by A.M. Best Rating Services, Inc. and/or its RIGHTS RESERVED. View source version on CONTACT: Jason Hopper Associate Director Industry Research & Analytics +1 908 882 1896 [email protected] Christopher Sharkey Associate Director, Public Relations +1 908 882 2310 [email protected] Doniella Pliss Director +1 908 882 2245 [email protected] Al Slavin Senior Public Relations Specialist +1 908 882 2318 [email protected] KEYWORD: EUROPE UNITED STATES NORTH AMERICA NEW YORK NEW JERSEY INDUSTRY KEYWORD: PROFESSIONAL SERVICES INSURANCE BUSINESS FINANCE SOURCE: AM Best Copyright Business Wire 2025. PUB: 04/17/2025 08:52 AM/DISC: 04/17/2025 08:52 AM
Yahoo
03-04-2025
- Business
- Yahoo
Best's Special Report: U.S. Life/Annuity Insurers Increased Bond Purchases in 2024; Mortgages and Alternative Assets Investment Growth Muted
OLDWICK, N.J., April 03, 2025--(BUSINESS WIRE)--U.S. life/annuity (L/A) insurers allocated a higher share of new investment purchases toward bonds over mortgages and alternative assets through the first three quarters of 2024, when compared with the prior two years, according to a new AM Best report. The Best's Special Report, "NAIC-2 Bond Purchases Climb in 2024; Mortgages and Alternatives Muted," notes that reinvestment of cash flows by L/A insurers into higher yielding bonds and mortgages drove net investment income by more than 8% year over year through the third quarter of 2024. "Insurers continue to invest in private credit and asset-backed securities," said Jason Hopper, associate director, AM Best. "This in turn increases the focus on liquidity, capacity, and the continued appetite for this asset class, as well as the underwriting and due diligence of asset managers." According to the report, the quality of bond portfolios within the segment remains high and largely investment grade. More than 30% of newly purchased bonds in the third quarter of 2024 were rated NAIC-2, up nearly twofold from 16% in 2020, and marking the highest level in five years. The influx of NAIC-2 rated debentures has played a role by creating a supply side issue. "This increased supply of bond issues has lowered prices, making them more appealing to insurance companies looking for value in a competitive market and more attractive on a relative basis," said Jacob Conner, associate analyst, AM Best. Among the report's other highlights: Mortgage loans accounted for 11% of all investment acquisitions as of third quarter 2024, with new acquisitions being fueled largely by residential properties; Insurers have been adjusting to downward pressure facing office properties since the COVID-19 pandemic, limiting new purchases and shrinking the allocation to this property type, favoring other property types with more attractive characteristics; Approximately 15% of alternative assets acquired by L/A companies through the third quarter of 2024 were private equity investments, significantly lower than its year-end 2023 allocation of over 45%; To access the full copy of this special report, please visit To view a related video on the report featuring Jason Hopper and Jacob Conner, please visit AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED. View source version on Contacts Jason Hopper Associate Director, Industry Research and Analytics +1 908 882 1896 Jacob Conner Associate Analyst +1 908 882 2465 Christopher Sharkey Associate Director, Public Relations +1 908 882 2310 Al Slavin Senior Public Relations Specialist +1 908 882 2318 Sign in to access your portfolio
Yahoo
26-03-2025
- Business
- Yahoo
Best's Special Report: Eligibility Redeterminations Put Pressure on Medicaid Managed Care Segment
OLDWICK, N.J., March 26, 2025--(BUSINESS WIRE)--Eligibility redeterminations in the Medicaid managed care segment following the end of the public health emergency period is leading to a mismatch between acuity and rates, according to a new AM Best report. During the public health emergency from COVID-19, the segment experienced significant enrollment growth in 2020-2022 due to the lack of Medicaid eligibility redeterminations. The Best's Special Report, "Medicaid Redeterminations Put Pressure on Segment," states that since the provision expired on March 31, 2023, and states resumed the process of eligibility redeterminations, Managed Medicaid insurers have seen steep declines in enrollment, with Idaho leading the way with a 38% enrollment drop and 15 other states experiencing a drop of more than 20%. Lagging rate increases have created a mismatch between acuity and pricing. "The majority of disenrolled Medicaid members tended to be healthier members, resulting in higher acuity in the segment," said Kaitlin Piasecki, industry research analyst, AM Best. "Current pricing still reflects the healthier risk pool, and so necessary rate increases have lagged the acuity level and led to margin pressure in the segment." Because of the disconnect between pricing and risk profiles, according to the report, the ratio of incurred claims to direct premium has risen by more than seven percentage points through third-quarter 2024 to 92.0 from the 2020 pandemic low point of 84.8. Managed Medicaid is a high-volume business with narrow margins, and although industry earnings have been consistently positive, margins have been tightening. The report notes that nearly all managed Medicaid filing entities are single-state writers. At year-end 2023, 70% of companies reported a decline in underwriting profitability in their managed Medicaid business. "Profitability may be difficult for some carriers, but many of the well-known health insurers have been challenged before and have demonstrated their ability to withstand difficult operating conditions," said Jason Hopper, associate director, Industry Research and Analytics, AM Best. The segment recorded a $1.8 billion underwriting gain through third-quarter 2024, compared with $5.3 billion for all of 2023. Despite the rate adequacy concerns, managed Medicaid profitability is expected to improve in 2025 and into 2026, as rate increases better reflecting the recent acuity profile and trends for the currently enrolled population are implemented. However, uncertainties related to federal funding cuts to the program remain. To access the full copy of this special report, please visit AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED. View source version on Contacts Kaitlin Piasecki Industry Research Analyst +1 908 882 2458 Jason Hopper Associate Director, Industry Research and Analytics +1 908 882 1896 Christopher Sharkey Associate Director, Public Relations +1 908 882 2310 Al Slavin Senior Public Relations Specialist +1 908 882 2318 Sign in to access your portfolio
