The period 2003-2007 was very favorable for the homeowners insurance line after the bleak 20-year period that preceded it, according to a new study by Hartford-based Conning Research and Consulting.
While returns relative to risk still do not compare favorably with other major lines, this five-year period did represent a marked improvement in financial performance for the line, Conning said.
Yet, the immediate future may not be as favorable.
The Conning study, “The Homeowners Insurance Market: The Eye of the Storm,” analyzes the economic and regulatory pressures on the line, as well as issues related to catastrophe management and distribution changes that will have profound effects on homeowners insurance in the coming years.Â
“With the increased pressures on the homeowners insurance line associated with both the economy and regulatory issues, it is clear that insurers will need to manage carefully through the next few years,” said Stephan Christiansen, director of research at Conning. “Our research indicates that those insurers who have innovated in technology and are willing to innovate in policy simplification and more sophisticated pricing approaches will be at a significant advantage in this challenging environment.”
