Property-casualty insurers improving reserve levels in the pastyear could be threatened by a softening pricing environment,according to a new Standard & Poor's report.
"Underwriting discipline has improved since the late 1990s, wheninsurers grossly underpriced to gain market share and relied oninvestment income to sustain financial strength," said Standard& Poor's credit analyst Siddhartha Ghosh. "That, coupled with aharder market, has yielded high profitability andlower-than-expected loss levels."
The industry's overall reserve position improved substantiallyin 2005, compared with the preceding three years (2002-2004).
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