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A year in review

A cat-heavy third quarter, along with weakening fundamentals and indications of an underwhelming 1 January 2018 renewal season, weighed down industry stocks in 2017.

The companies most exposed to these factors lost investor confidence as rate increases came in below expectations, which led stocks to close the year in the red.

This was most evident at Bermuda-based companies, while London carriers were 2017's clear winners.

Valuations biggest movers

Q1

  • AmTrust's share price plunged by 32.6 percent after it admitted weaknesses in financial controls and that its prior stated financials should no longer be relied upon and would be re-stated

  • At AIG, Peter Hancock stepped down as CEO on 9 March after the company disclosed a $5.6bn reserve charge to cover prior-year claims, leading to a 4.4 percent stock decline in the quarter

  • The UK government cut the discount rate for injury compensation - also known as the Ogden rate - in late February. The move caused consternation among carriers with UK motor exposure such as Novae, which closed the quarter 8 percent lower

Q2

  • P&C stocks mostly on the rise

  • London-based carriers led the pack, with Hiscox up by 17.7 percent in the quarter while Beazley increased by 14.1 percent

Q3

  • P&C stocks depressed during hurricane season

    Market digested the extent of the hurricanes' impact on results and what that would mean for full-year earnings

Q4

  • Focus shifted from the actual losses generated by the hurricanes to how they would impact pricing

  • Tax reform in US has mixed impact as investors predict winners and losers

  • Increased investor scepticism amid fears the industry would not see a meaningful correction in pricing, with the $100bn industry loss having only eroded earnings rather than impacting (re)insurance capital

2017 stock movements
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