The U.S. personal-lines insurance sector==particularly the automarket==is entering a soft cycle in 2005, but this current softperiod is expected to be shorter-lived than previous ones, Standard& Poor's said in its new report.

S&P noted that at this point, the softening environment hasnot yet resulted in across-the-board rate cuts but has led to"looser underwriting standards in certain corners of the market."S&P offered its observations in a new report titled "U.S.Personal Lines Insurer Mid-Year Outlook: Market Continues To SoftenDespite Heavy 2004 Catastrophe Losses."

S&P credit analyst Polina Chernyak said the personal-linessector is at a crucial point where carriers could be tempted todiscount product offerings to build market share, a pattern lastobserved during the soft market in 1987-2001. "The concern is thatthis trend toward weaker operating results could soon reassertitself, especially given the higher yields available on investmentsas interest rates rise generally in U.S. financial markets," Ms.Chernyak said.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.