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A.M. Best Special Report: Pools & Trusts Show Modest Gains Amid Industrywide Soft Market

Business Wire, Nov 5, 2007

OLDWICK, N.J. -- Operating performance improved moderately in 2006 for self insurance pools and trusts rated by A.M. Best Co., with preliminary 2007 results indicating more of the same. A softening market, however, may spur increasing competition from commercial carriers and drive self insurance pools and associations to reduce rates. The pools and trusts in this study saw a 4.1 point decrease in the 2006 combined ratio after policyholder dividends.

* Net premiums written continued to increase in 2006 despite softening market conditions across the insurance industry in general.

* Net income grew significantly over the prior year and reflects the increase in premiums coupled with moderate decreases in losses and the associated expenses.

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* Investment yields improved significantly on an increasing base of invested assets and favorable interest rates as yields on treasury instruments grew.

* A changing investment market warrants monitoring, but self insurance pools are somewhat insulated by the conservative nature of their investment portfolios.

* Preliminary 2007 results show growing exposure for the funds domiciled in the Southeastern United States as the local economies in Alabama and Louisiana continue to flourish.

* The five-year average combined ratio for rated pools after policyholder dividends was 90.3, compared with 106.2 and 102.1 for captives and the commercial casualty index, respectively.

BestWeek subscribers can download a PDF copy of all full special reports at no additional cost or a combination of the PDF copies plus all related spreadsheet files of the report data at no additional cost from our Web site at www.bestweek.com.

Nonsubscribers can download a PDF copy of the full special report (8 pages) for $55 or a combination of the PDF copy plus the spreadsheet file of the report data for $140 from our Web site at www.bestweek.com. Call customer service for more information, (908) 439-2200, ext. 5742.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

Business Services Industry

A.M. Best Special Report: Pools & Trusts Show Modest Gains Amid Industrywide Soft Market

Business Wire, Nov 5, 2007

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