Analysts Fear Erosion In P-C Pricing After first underwriting profit since 1978, picture could change in a hurry

The U.S. property-casualty insurance sector, buttressed by its first annual underwriting profit in 26 years, recorded a 29 percent gain in net income and a record surplus level in 2004, according to consolidated industry data provided by two industry groups.

The big question, however, is whether the party is already over for p-c insurers, with premium growth slowing considerably.

Overall, the p-c sector had $38.7 billion in net profits last year, up from $30 billion in 2003. In nominal terms, last year's net income is the highest-ever recorded for the sectorbut adjusted for inflation, it's 10.6 percent below the all-time high in 1997, according to the Insurance Services Office and the Property Casualty Insurers Association of America.

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