The better a property-casualty company's financial strengthrating, the more it will benefit from the favorable operatingconditions of 2005, according to a new study from Moody's InvestorsServices.

The favorable pricing of 2003 and 2004, along with a focus onunderwriting discipline, has contributed to a significant reboundin profits and replenishment of capital strength, the reportsaid.

Some commercial lines companies, however, were negativelyimpacted by adverse reserve development, either from businesswritten during the soft market or from asbestos liabilities.

"Despite the favorable operating environment, lower-ratedcompanies have not benefited to the same degree as higher-ratedcompanies in crucial areas such as profitability and surplusgrowth," said Moody's associate analyst Enrico Leo.

The report said that 2005 top-10 ratios will remain relativelyconsistent despite the worst natural catastrophes in history."Following Hurricanes Katrina, Wilma and Rita, Moody's expectsprices for property lines to increase while terms and conditionswill tighten," the report said.