A.M. Best: Commercial Lines Market Also Stable
A.M. Best has completed its assessment of the U.S. commercial market and continues to view the outlook as stable for 2008 despite the ongoing soft period in the cycle. Commercial lines carriers have bolstered their positions after robust earnings in recent years by investing in price monitoring tools, predictive modeling, distribution channels and claims systems. Additionally, the segment has embraced enterprise risk management, and the extension and permanency of the federal terrorism backstop have removed uncertainty regarding this exposure. While profits likely will deteriorate in the coming years, the commercial lines segment generally has positioned itself to meet the challenges of changing market conditions throughout the cycle.
Those companies that are able to execute their business plans by adhering to underwriting fundamentals and placing profit first rather than giving in to the demands of the market will thrive in 2008 and beyond. The veterans of the industry have had plenty of experience operating during soft market conditions, which appear to have become the norm rather than a bump in the cycle.
Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.
Source: Source: A.M. Best Press Release | Published on February 27, 2008
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