With much lower realized capital gains and unrealized capital losses
likely to exceed those experienced during 2000, the policyholders' surplus for the property/casualty industry may fall by 8 percent or more when 2001 results are finalized.
The combination of pricing competition (resulting in worsening accident year loss ratios), growing reserve deficiencies and flat or reduced investment income with growing unrealized capital losses
has forced action in workers' compensation pricing and underwriting.
significant level of unrealized capital losses
Partially offsetting these positive rating factors are Cherokee's highly elevated common stock leverage, which exposes the company to the vagaries of the equity markets, as evidenced in 2008 when it reported significant realized and unrealized capital losses
, as well as its business concentration in the historically competitive commercial trucking segment.
Nonreinsurance losses were largely due to a significant level of unrealized capital losses
and reserve strengthening at Compagnie Nord-Africaine et Intercontinentale d'Assurances, (CNIA), ARIG's Moroccan operation.
The rating actions reflect Newport's weakened overall capitalization, poor operating performance and the combined impact of unrealized capital losses
and stockholder dividends, which has reduced policyholder surplus over the recent five-year period.
Factors contributing to this result include increased frequency and severity of catastrophe losses and unrealized capital losses
in recent years.
In addition, its large concentration in a single issuer (Banco Popular, which represents 10% of total invested assets and 21% of statutory capital) resulted in significant unrealized capital losses
Additionally, LMGI's overall capitalization was strained in 2008 and early 2009, following deteriorating operating results, modest unrealized capital losses
and the capital outlay for the purchase of Safeco Corporation.
6 million change in net unrealized capital losses
, offset in part by $15.
The company has not experienced realized or unrealized capital losses
over the past five years.
2 billion in unrealized capital losses
and $647 million in realized capital losses due primarily to unfavorable equity market conditions.