Looming underwriting losses that property-casualty insurers face this year will yield higher premiums, setting up an industry rebound for 2011 and beyond, a Hartford industry research firm says.
Conning Research & Consulting says in its latest Property-Casualty Industry forecast that results for the 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.
“Our expectation is for modest growth in 2010, with net premium growth positive, but weaker than GDP growth,” said Conning Research analyst Clint Harris. “Yet we also anticipate a deterioration in the loss ratio due to eroded premium rate adequacy and expected thinner loss reserve releases.”
The analysis forecasts industry growth and performance for 2009-2012. Â
“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.”
