The inland marine insurance sector has been one of the property and casualty industry’s most profitable and consistent lines of business over the last 10 years, according to new data from rating agency A.M. Best.
Inland marine’s dependability is due mainly to greater diversification when compared to other property lines, according to an A.M. Best report titled
“Inland Marine: Unique Risks and a Knack for Profits.” That diversification mitigates the overall effects of any one event.
According to the report, the inland marine sector’s combined ratio has a strong positive correlation with other major property lines – but it hasn’t experienced the same peaks and valleys as lines like commercial multi-peril, fire and homeowners’/farmowners’. Inland marine is also the only one of these lines not to report an underwriting loss since 2006.
“Except for the catastrophe-impacted years, combined ratios have remained under 90.0 during this time period,” A.M. Best said in a news release. “A.M. Best expects results in 2017 to deteriorate compared with 2016 owing to Hurricanes Harvey and Irma and decreasing rates, but believes inland marine insurers will still post underwriting profits.”
Inland marine accounted for about 2.1% of total P&C net premiums in 2016 – about US$11.4 billion, A.M. Best reported.
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