P&C impairments tripled last year in the United States: A.M. Best

U.S. property and casualty insurer financial impairments have more than tripled since 2007, reports A.M. Best.
In contrast, regulators have not closed a Canadian insurance company during that time frame, confirms the Property and Casualty Insurer Compensation Corporation (PACICC).
Eighteen property and casualty insurer impairments were reported in the United States in 2009, up from 16 in 2008 and five in 2007.
So far in 2010, A.M. Best has identified four property and casualty insurance company financial impairments.
The ratings agency goes on to warn there may be a lag in reporting of the 2009 financial impairments, and as such there may be more to come.
“Lags in the reporting of financial impairments are often due to the reluctance of state regulators to publicly disclose impairments until they have exhausted all avenues to rehabilitate or facilitate a sale or merger of a troubled insurer,” A.M. Best said in its Special Report.
Only three financial impairments in 2009 were directly attributable to investment problems or understated assets, it continued.
“Most of the P&C impairments for the year resulted from under-pricing, under-reserving, and too-rapid growth in the years immediately preceding impairment.”