Conning Research Projects Property-Casualty Industry Underwriting Profit in 2006

Performance Will Decline Slowly through 2008

(Hartford, CT) August 15, 2006 – Property casualty insurers can expect another year of overall industry underwriting profit in 2006, matching the results of 2004, according to the latest Conning Research and Consulting, Inc. forecast report for the property-casualty industry, which provides a first look at results through 2008.

“Analysis of 2005 results for the industry shows a remarkable consistency in profitability by line of business, aside from the effects of catastrophes,” said Stephan Christiansen, director of research at Conning Research & Consulting, Inc. “Profitability continues through 2006, but slowing premium growth, rising loss costs and accumulating surplus will take their toll and the industry will again show combined ratios above 100% in 2007 and 2008.”

The Conning Research study, “Property-Casualty Forecast & Analysis by Line of Insurance, 2005-2008” reports on 2005 preliminary results for the industry and forecasts results for the property-casualty industry and its top lines of business through 2008.

“Our study identifies several conditions that are clouding our 2006-2008 forecasts,” said Christiansen. “Market conditions are becoming more price-competitive outside of catastrophe-prone areas, but with some volatility. This is stimulated by surplus accumulation, strong loss reserves and strong cash flow. The projection also reflects an expectation for heightened catastrophe losses, but below the levels seen in 2004 and 2005. Increased pricing for coastal exposures, and higher costs and reduced availability of reinsurance are helping to moderate these premium trends through 2008. Overall, we expect ROEs will slowly subside, falling from 9.2% in 2005 to 7% by 2008.”

“Property-Casualty Forecast & Analysis by Line of Insurance, 2005-2008” is available for purchase on a quarterly subscription basis from Conning Research & Consulting, Inc., by calling (888) 707-1177 or by visiting the company’s web site at www.conningresearch.com

About Conning Research & Consulting, Inc.

Conning provides insurance industry analysis to insurers and industry stakeholders. The Conning name has represented excellence in independent insurance industry research for more than 40 years. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth insights and analyses on a wide range of industry products and issues. Conning is headquartered in Hartford, CT.