NU Online News Service, March 23, 3:05 p.m.EDT
|Reserve releases were higher in 2011 than in 2010 and 2009 forpersonal- and commercial-lines companies followed by ALIRTInsurance Research, shaving 2.4 points off of those companies’ 2011combined ratio, the firm notes.
|The ALIRT P&C Composite consists of the 50 largest U.S.insurers, according to the firm.
|SEE SLIDESHOW: From Underwriting Results to Reserve Releases,ALIRT Charts Wrap Up 2011
|ALIRT says, “Favorable prior-year reserve development wasdeclining as the soft market dragged on, but reserve releases wereagain quite large in 2011.”
|A separate analysis released by Stifel Nicolaus states thatstatutory loss-reserve development declined from 2010 to 2011 byabout 14 percent, excluding activity at AIG.
|A chart released by ALIRT shows the companies it followedreported about $5.5 billion in favorable development in2011—well over 2010, which saw lessthan $2.5 billion in favorable development, and 2009, whichsaw less than $4 billion. In 2008, the ALIRT Compositereported just under $6 billion in favorable development.
|This helped lower the combined ratio in 2011 by the most pointssince 2008, when reserve releases shaved 2.5 points from the ALIRTComposite combined ratio.
|David Paul, a principal at ALIRT, says four of the Top10 reserve releases for the year came from personal-linescompanies. For personal lines, in particular, Paul says many of thereserves released were from recent years.
|But he adds that there were still big releases for the years2007 and 2008 among companies in the ALIRT Composite. He notes thatwhile much of the talk around the industry points to prior-yearreserves being exhausted, “we’re not seeing that yet.”
|Despite the favorable impact of the reserve releases, the ALIRTComposite reported a 2011 combined ratio of 107.1, due mainly tocatastrophe losses, ALIRT says.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- 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.
Already have an account? Sign In
© 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.
