Falling interest rates and stalled premium growth mean the bestreturns on equity the property-casualty insurance industry can hopefor in coming years will be in the high-single-digits, according tothe president of the Insurance Information Institute, Robert P.Hartwig.

"Interest rates are lower than they were a decade ago. They'refalling, and they're going to fall again," Mr. Hartwig said, notingthat volatile stock market returns add to a bleak investmentpicture that has so far kept insurers focused on maintaining goodunderwriting results.

Addressing the Casualty Actuaries of Greater New York, Mr.Hartwig said the industry is expected to earn roughly $60 billionfrom its investment portfolio in 2007--including interest on bonds,stock dividends as well as realized and unrealized capital gains.This figure is no better than it was a decade ago, he noted, eventhough invested assets have grown in the intervening years.

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