While insurance cycles may not have yet gone the way ofhigh-button shoes, technology improvements could ease their impact,according to industry experts.

In a conference call following the release of first-quarterproperty-casualty industry financial data, Mike Murray, InsuranceServices Office assistant vice president, said that all soft cyclesstart slowly and then accelerate sharply.

His comments followed a report by ISO and the Property CasualtyInsurers Association of America that the U.S. property-casualtyinsurance industry is continuing in a soft cycle of declining rateswith first-quarter net income after taxes dipping 5.5 percent fromthe same period last year.

The p-c industry reported $15.8 billion income in the quartercompared with $16.7 billion last year and $17.7 billion in the same2005 period.

Mr. Murray, discussing the possibility of a less dramaticpattern to the cycle, said "this time around people are talkingabout some wild cards that might change that picture."

Low interest rates and a more centralized command and controlsystem by the big carriers for their underwriting operations couldlessen the impact of softening price cycles, he explained.

With carriers unable to rely on investment income to make up forunderwriting risks gone awry, insurers will have to stick closer tosound underwriting principles, Mr. Murray said.

And the fact that carriers have more sophisticated technology tokeep a sharper eye on far flung underwriting operations will onlyincrease this factor.

Robert P. Hartwig, president of the Insurance InformationInstitute, said the only question that remains is how long thedecline in profitability will last and "how many years it will taketo get to the bottom."

Mr. Murray said despite the fact the industry's combined ratioof 91.7 is the second best for any quarter in the past 21 years,the insurance industry's rate of return failed to reach otherindustries' similar figure.

"During the 24 years from 1983 to 2006, the comparable rate ofreturn for the Fortune 500 averaged 13.9 percent, and escalatingcompetition in insurance markets suggests insurers' rate of returnwill fall further below that earned by firms in other industriesrather than rise to meet it," he said.