Fitch Ratings Insurance Insights — October 2012 Edition
Oct 4, 2012
Below is the October 2012 edition of Fitch Ratings’ “Insurance Insights” newsletter:
The Insurance Insights newsletter provides a monthly round up of Fitch Ratings’ special reports, industry trends and company research for the insurance markets. For comprehensive coverage of the insurance sector as it’s published, please regularly check the Fitch website for updates.
U.S. Property/Casualty Insurer Long-Term Financial Performance
This report examines statutory financial performance for the U.S. property/casualty insurance industry and 30 of the largest market participants over the last 10 years. Rating analysis benefits from a comparison of longer term performance for an individual insurer versus the industry and peers given the volatility in financial results over a “normal” cycle. The most recent 10-year period 2002-2011 represented a nearly compete round trip through the market cycle with a hard market leading into several years of softening conditions that led to a very poor 2011. Financial performance from 2002-2011 is analyzed using five unique measures that consider: underwriting performance, net profit margin, cash flow, returns on capital, and internal capital formation, providing rankings of five and 10 year average company performance under each individual measure and for the five measures combined.
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Insurance Rating Methodology
Fitch Ratings completed its periodic review and published an updated version of its criteria for insurance entities. The update is not expected to result in changes to any ratings. Modifications and revisions made as part of the update include: various tables to improve clarity; the calculation of the fixed charge coverage ratio; guidelines for a ‘Core’ subsidiary in the context of group ratings; description of the rating treatment of kikin, a hybrid security issued by Japanese insurance companies; and changes in the regulatory environments of several countries.
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Global Cross-Asset First Half 2012 Default Update
Fitch Ratings released a study examining default trends across its universe of rated global corporate, sovereign, public finance, and structured finance securities in the first half of 2012. Global default activity moderated further in the first half of the year. Fitch Ratings recorded no investment-grade defaults across the agency’s portfolio of global securities. Default levels remained modest across the corporate, sovereign, ABS, and public finance sectors with all defaults associated with speculative grade entities. Default activity was more pronounced across CMBS, RMBS, and structured credit but showed improvement year over year. One sovereign default was recorded through June; Greece’s default was the result of the country’s distressed debt exchange completed earlier this year.
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*These reports are Fitch Research Premium Content and not available with a free registration or are available for a limited time to free registrants. Fitch Research is a paid service which features access to all current and historical ratings, exclusive research reports, and detailed bond surveillance. For more information about Fitch Research click here.
Insurance September 2012 Company Reports
Please note that the following reports are Fitch Research Premium Content.
Sep 26 White Mountains Insurance Group, Ltd. (And Subsidiaries)
Sep 24 Cigna Corporation (And Insurance Operating Subsidiaries)
Sep 21 Blue Cross of Idaho Health Service Inc.
Sep 21 Massachusetts Mutual Life Insurance Company (And Life Insurance Subsidiaries)
Sep 20 Stewart Information Services Corporation (And Insurance Subsidiaries)
Sep 18 Hiscox Ltd – And Insurance Subsidiaries
Sep 14 Assicurazioni Generali SpA
Sep 14 Legal & General Group Plc
Sep 14 Prudential Plc
Sep 13 W.R. Berkley Corporation (And Insurance Company Subsidiaries)
Sep 07 QBE Insurance Group Limited
Sep 07 China Taiping Insurance Holdings Co Ltd