U.S. Insurers Should Be Stable in 2013, Says S&P

U.S. insurance sectors are generally poised for stable credit trends in 2013, resulting from strong balance sheets, a stable business climate, and improved enterprise risk management, according to Standard & Poor’s Ratings Services.

In a report titled, U.S. Insurers’ Sound Fundamentals Should Counteract Sluggish 2013 Economic Performance, the rating firm said that the Congressional deal to avert or at least delay the so-called fiscal cliff reduced the near-term likelihood of the U.S. economy falling into recession. However, S&P said the recovery remains fragile and further political brinksmanship over spending and the deficit could overshadow the economy and markets for much of 2013.

“This sluggish recovery continues to weigh on all insurance sectors, and we expect the rating impact to be stable to modestly negative in 2013,” said Standard & Poor’s credit analyst Rodney Clark. “However, risk aversion and strongly recovered capital bases since the financial crisis will go far in mitigating negative factors. Unfortunately, we expect the downside risks to continue to outweigh upside risks at least in 2013.”