NU Online News Service, Oct. 27, 11:06 a.m.EDT

ACE Ltd. Chief Executive Officer Evan Greenberg says Septemberwas the best month for pricing this year, and a statement by Fitchsays it is seeing “positive” rate increases, but as Greenberg says,whether the trend continues “remains to be seen.”

During a conference call to discuss third-quarter earnings,Greenberg says “pricing overall continues to firm” as “more classesachieve positive rate while rate decreases were smaller.”

Some companies continue to write irresponsibly, saysGreenberg.

“They don't know any better,” he says. “I'm convinced many ofthem don't know the difference between what's an adequate orinadequate price.”

Meanwhile, the best companies “are endeavoring to do what we doand show discipline. And they are trying to press the market torecognize a price that reflects the risk.”

Greenberg continues, “I see a number of companies that aretrying—a few that are brand names—that are trying to do what we'redoing.”

Meanwhile, Fitch says in a statement that while positive rateincreases occurring throughout the industry are encouraging,“premium rates in many market segments are well below the levelcorresponding to an adequate return on capital, and it isquestionable whether near-term pricing momentum is sustainablegiven the amount of underwriting capacity that remains activewithin the broader market.”

Fitch also says underwriting combined-ratio targets to producefavorable returns on capital are higher given a continued declinein investment yields.

But Fitch does note that it views better industry pricing “as asign that returns on capital will stabilize in 2012.”

As a sign that rates have been increasing, Fitch points to arecent Council of Insurance Agents and Brokers commercial linesmarket survey showing a 1 percent price increase in the third quarter, the firstreported increase since 2004.

Fitch also notes that insurance broker Willis Group HoldingsPLC, in its recent earnings conference call, indicates that rates overallwere flat but rising in weaker-performing segments, includingworkers' compensation and property lines.

For ACE, property and casualty net premiums in North Americawere up 53 percent during the quarter, primarily driven by highnet-worth personal lines, ACE's crop insurance business, andwholesale business where the company experienced “modest growth forthe first time in many quarters.”

ACE looks to close the acquisition of agricultural insurer PennMillers in the first quarter 2012 and ACE remains “open toadditional acquisitions where they further our strategy,” Greenbergsays.

“We are seeing a greater pipeline of opportunity than in recentpast,” adds Greenberg, due to the stressed economicenvironment.

The news about rates was positive in most of ACE's lines ofbusiness as the company reported a $31 million third-quarter loss due to losses in its variableannuity reinsurance business.

Greenberg reports retail commercial in the U.S. achievedpositive rates in standard lines while property and casualty rateswere up 3.2 percent. Specialty casualty was up 3.2 percent and forthe “first time in a long time” rates in ACE's risk managementbusiness were flat instead of down.

Greenberg says new business and renewal pricing are “trackingvery closely” and in some cases new business pricing has beenbetter than renewals.

Additional reporting by Phil Gusman