Economic Recovery is Major Driver through 2012; Industry Turnaround in Forecast for 2011
(Hartford, CT) April 20, 2010 – Results for the property-casualty industry over the next few years will be driven by the economic recovery, a return to a modest inflationary environment, and larger underwriting losses in 2010 leading to rate firming in 2011, according to the most recent Property-Casualty Industry Forecast by Conning Research & Consulting.
“Our expectation is for modest growth in 2010, with net premium growth positive, but weaker than GDP growth,” said Clint Harris, analyst at Conning Research & Consulting. “Yet we also anticipate a deterioration in the loss ratio due to eroded premium rate adequacy and expected thinner loss reserve releases. While the overall combined ratio increase is a significant 2.5 points under average catastrophe load, implied return on equity should increase to approximately 7 percent due to the positive impact of realized capital gains.”
The Conning Research study, “Property-Casualty Forecast & Analysis” forecasts industry growth and performance for 2009-2012. The report is based on Conning’s proprietary industry model and analysis of key industry drivers as well as statutory data filings, public insurer reports results, and 2010 catastrophe loss estimates to date.
“Looking beyond 2010, more robust growth for the property-casualty industry in 2011 and 2012 will result from increases in both exposures and premium rates,” said Stephan Christiansen, director of research at Conning. “While personal lines is leading the industry even in 2010 with robust premium rate growth, many commercial lines, and particularly workers compensation, will not see improvements in combined ratio until 2012.”
Conning’s “Property-Casualty Forecast & Analysis” is available for purchase from Conning Research & Consulting by calling (888) 707-1177 or by visiting the company’s web site at www.conningresearch.com.
About Conning Research & Consulting
Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers. Conning Research & Consulting has published independent insurance industry research for 50 years, including market coverage of 30 segments of the industry in addition to industry forecasting and identification and analysis of major strategic issues. 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 analyses on a wide range of industry products and issues. Conning is headquartered in Hartford, CT. http://www.conning.com/.