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Fitch forecasts stable year for US broking

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The US broking industry’s credit fundamentals will remain solid next year, according to Fitch Ratings.

Publicly traded brokers’ aggregate run-rate profitability and balance sheet credit profile are expected to remain consistent with investment-grade ratings guidelines.

“The fundamental sector outlook is stable because profitability levels remain favourable in the sector,” the ratings agency says.

“Modest near-term insurance premium rate improvement is expected in some reinsurance and commercial insurance segments following a year of large natural catastrophe losses.”

Brokers will continue to supplement organic revenue growth through acquisitions, including diversification efforts in employee benefits, data analytics and emerging markets such as political and cyber risks.

Organic revenue growth will stay positive over the next 12-18 months, Fitch says.