The universe of captives rated by A.M. Best continues to outperform the commercial sector in every key financial measure, according to the latest edition of Best’s Journal.

In 2013, the US captive composite posted a 12.4-point improvement in the loss and loss-adjustment expense ratio over the prior year, aided by a respite from major, outsize property losses.

The report also noted that risk retention groups (RRGs) produced aggregate operating results that outperformed a peer group of commercial casualty writers.

Other highlights of the report include the premium increase of US state workers’ compensation funds. This occurred for the third straight year in 2013 as pricing hardened, the economy improved and greater demand for residual market business appeared more likely.

The report also predicted that the federal terrorism backstop bills would place greater onus on insurers and increase the insurance industry’s overall liability.

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