BestWeek: P/C Insurers Expected to Realize 2007 Underwriting Profit, ''Modest Decline'' Ahead

Based on financial results through the third quarter, the U.S. property/casualty industry is expected to post an underwriting profit for 2007 — marking only the third time this has happened since 1978, according to a new A.M. Best Co. special report, “U.S. Property/Casualty 9-Month Financial Review.”

However, there is concern that the sustainability of solid operating results teeters upon how the industry handles increased competition, premium erosion and rising surplus levels.
Underwriting conditions remained positive during the first nine months of 2007, with property/casualty insurers recording underwriting income of $18.6 billion, compared with $23.8 billion during the same period a year ago, according to the report.

The industry’ s combined ratio remained a profitable 93.8, up slightly from the 91.7 achieved during the first nine months of 2006.

Yet A.M. Best expects underwriting results to experience a “modest decline” through 2007 and into 2008 as insurers give way to competitive pressures and begin to exercise less underwriting discipline, eroding industry operating performance with declining rates.

Source: BestWeek (www.ambest.com)

From: Insurance News net (www.insurancenewsnet.com)