The financial condition of the property/casualty industry is strong; and, it should be able to withstand the current price deterioration, according to a new Property-Casualty Industry Forecast by Conning Research and Consulting.
“The outlook for the next three years through 2010 is generally soft for the property-casualty industry as a whole. We project continued deterioration in underwriting margins and implied return on equity,” said Clint Harris, analyst at Conning Research & Consulting. “However, the largest year-over-year increase in combined ratio is in 2008, and while this reflects a return to normal catastrophe losses, much of this deterioration is self-inflicted, as premium prices and premium rate adequacy continue to fall.”
The Conning Research study, “Property-Casualty Forecast & Analysis” identifies the key drivers of the industry and forecasts industry growth and performance for 2007-2010.
“Looking beyond this year, our forecast contains a somewhat more optimistic view of 2009 and 2010 because we anticipate a modest rebound in the economy and also a moderating competitive environment. We project a return to net premium rate increases beginning in some lines as early as 2009,” said Stephan Christiansen, director of research at Conning. “In fact, we are already beginning to observe some insurers taking corrective actions in their markets because of poor results.”
Source: Conning Research & Consulting,
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