Evolving criteria: United States

Today is an unprecedented time for the U.S. P&C industry. For P&C insurers, success can be attained by generating profit in the face of a slowly improving economy, low interest rates, and frequent catastrophic events. One key for success is effectively managing risk at all levels of the enterprise in the face of an increasingly complex risk landscape, all while navigating the intricacies of ever evolving ratings criteria. Despite these challenges, the industry is improving. Capitalization is at an all-time high, and while overall profitability is trending favourably, competition is fierce. Rating activity is reflective of this, as the industry has finally begun to see an increase in rating upgrades. In order to maintain this positive momentum, P&C insurers must effectively react to both the ongoing and new concerns of the rating agencies. Rating agencies’ focus remains on a firm’s ability to deliver on their projected results. The importance of enterprise risk management continues to grow, as the rating agencies seek to measure the efficacy of how a company manages risk throughout its entire organization. In addition, the uncertainty surrounding the expiration of TRIPRA is also of increasing concern. While these are just a few examples, understanding and managing the evolving criteria has and will continue to be an integral component of an insurer’s success.