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

In a conference call following the release of first-quarter property-casualty industry financial data, Mike Murray, Insurance Services Office assistant vice president, said that all soft cycles start slowly and then accelerate sharply.

His comments followed a report by ISO and the Property Casualty Insurers Association of America that the U.S. property-casualty insurance industry is continuing in a soft cycle of declining rates with first-quarter net income after taxes dipping 5.5 percent from the same period last year.

The p-c industry reported $15.8 billion income in the quarter compared with $16.7 billion last year and $17.7 billion in the same 2005 period.

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

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

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

And the fact that carriers have more sophisticated technology to keep a sharper eye on far flung underwriting operations will only increase this factor.

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

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

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

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