However, the study found that deficiencies still exist in the industry.

"In many ways, 2002 appeared to mark a turning point in reserve adequacy," said Michael Weinstein, research director for Conning Research & Consulting in Hartford, Conn.

"The addition of $17 billion in total reserves and the industry's refocus on underwriting, loss control, and claims management of loss exposures have reduced the prior-year estimated deficiency," he added. "Accident years 1997-2001 still appear to be deficient, but accident year 2002 carried reserves may be adequate."

Despite the improvement in the industry's reserve position, the study found that at current levels there is still much work to be done.

Conning noted that reserve addition announcements relating to prior periods have continued this year, and Conning found it "highly likely that, as individual insurers assess their situations, industry reserves will continue to increase."

"Insurers are operating under a different external environment than just two or three years ago," said Mr. Weinstein. "Scandals, such as those associated with financial reporting at Enron, resulted in the demise of Arthur Andersen and the enactment of The Sarbanes-Oxley Act of 2002. We believe this is causing auditors to scrutinize financial statements, including reserves, "more closely prior to signing off on them."

The study may be purchased from Conning Research & Consulting, Inc., by calling (888) 707-1177 or visiting the www.conningresearch.com Web site.