...The aggregate financial leverage ratio (FLR) for the peer group of 33 North American property/casualty (P/C) (re)insurers improved by approximately 240 basis points (bp) to 17% at year-end (YE) 2024. Results were heavily influenced by Berkshire Hathaway, Inc. (BRK), which holds over half of the group's total debt. Trends remained consistent, with all but four issuers reducing leverage in 2024. The FLR calculation excludes the effect of accumulated other comprehensive income (AOCI), which consists mainly of unrealized losses on fixed-income investments for this group of companies. Most insurers' buy-and-hold investment strategy means values will gradually recover towards par value as maturity approaches. On a stated equity basis, the FLR would be 56 bp higher. Well-laddered maturities of long-term debt, high interest rates and limited mergers and acquisitions (M&A) activity led to a decline in the dollar amount of borrowed money in 2024. The lower financial leverage currently seen in the...
