Industry insiders say downgrade should not impact insurers

Posted on: Tuesday, August 09, 2011

Given recent economic events, many queries posed to agents lately may be related to the downgrade of the United States' credit rating, as many may be wondering how it will affect premiums.

Fortunately, agents can assure their clients that the aftermath should have no immediate impact on their policies or how insurers operate, according to the Insurance Information Institute.

"The nation's property/casualty insurers have very limited direct exposure to the U.S. government bond market and have collectively set aside hundreds of billions of dollars to pay unanticipated claims," said Robert Hartwig, an economist and president of the III. "Existing policyholders people and businesses filing claims and those seeking to purchase insurance will not experience any difficulties arising from the downgrade."

Also assuring the minimum impact on the insurance industry was Susan Voss, president of the National Association of Insurance Commissioners. While Voss couldn't guarantee the insurance industry would be unaffected over the long-term, she did say regulators would take the appropriate steps to make sure operations run as smoothly as possible should it prove necessary.

In short, agents can set their clients' and insurance leads' minds at ease if they were worried about the downgrade aftermath affecting their policies.

Posted In: Insurance News, Property & Casualty Insurance

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