Filed Under:Markets, Commercial Lines

Recent Reports Outline Stiff Industry Challenges Despite Rising Rates

NU Online News Service, Aug. 16, 3:22 p.m. EDT

Property and casualty insurance rates are on the rise. This point is indisputable. But reports released in late July through August seem unsure of whether the pricing trend will build into sustained underwriting profits during a period of rising loss costs and low investment returns.

In response to the second-quarter CIAB survey, James B. Auden, managing director at Fitch Ratings, said of the recent trend toward rate increases, “We wonder how much momentum there is.”

He said low interest rates producing small investment yields and declining favorable reserves would suggest increases continuing into at least early next year, but he stated that insurers will not see underwriting profitability until the industry gets to a combined ratio in the mid-90s.

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