Rating agency A.M. Best released its annual tally of U.S. property/casualty industry financial impairments yesterday, counting up 21 for 2012—13 less than the 2011 figure of 34.

The 2012 count was also four more than a preliminary total of 17 for 2012 announced by the Oldwick, N.J.-based rating agency earlier this year.

Explaining some of the trends behind the numbers in an interview with Carrier Management earlier this year, when the earlier figures were announced, Anthony Diodato, a group vice president, said that the leading cause of P/C impairments continues to be a combination of reserve deficiencies and inadequate pricing.

The new report also updates A.M. Best’s historical P/C database of financial impairments for 1969 through 2012, finding that the 2012 experience was below the P/C historical average impairment count of 25.8.

Best also reported that the P/C industry’s 2012 financial impairment frequency was 0.69 percent also falling below the industry’s historical average, which was 0.82, and suggesting that this is a more accurate indicator of impairment trends than a mere count

The 2012 figure was roughly in line with the levels reported from 2008-2010, before the weak U.S. economy and troubled real estate industry drove the 2011 FIF to 1.11 percent, Best said.

The storm appeared to pass for the mortgage guaranty sector in 2012, with no impairments in that line of business, compared with eight in 2011.

When Best released its preliminary count in March, that report noted that the total number of impairments for 2012 could rise at a future date, owing to the fact that many of the impairment relate to smaller companies that are not rated by A.M. Best. Time lags in capturing the impairments for any given year can also relate to the practice of confidential supervisions by regulatory authorities.

For the purposes of its analysis, A.M. Best designates an insurer as financially impaired as of the first official regulatory action taken by an insurance department indicating that one or more of the following conditions is true:

• The carrier’s ability to conduct normal insurance operations is adversely affected
• Capital and surplus is inadequate to meet legal requirements
• The carrier’s general financial condition has triggered regulatory concern