Although commercial-lines pricing is expected to continue its upward trend, ratings agency A.M. Best is maintaining a negative outlook on the sector due to weak macroeconomics, less-favorable loss-reserve development and low investment yields.
"As more and more commercial lines insurers are demonstrating their ability to achieve rate increase, premium growth in commercial lines appears sustainable," says A.M. Best in its latest property and casualty Review & Preview. "The question is to what degree? While pricing trends are encouraging, A.M. Best believes commercial insurers still have a way to go before they can declare this a hard market."
The ratings agency notes that a negative outlook means that it expects the vast majority of rating actions during the year to be affirmations, but negative rating actions will outnumber positive ones.
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