The number of insurers put under state supervision fell to its lowest point in a decade, according to research by Standard and Poor's.

The research found that the number of insolvencies has declined steadily among insurance companies in recent years, and property and casualty insurers are making up a smaller percentage of those failures.

There were 19 insolvencies in 2004 across all lines, 16 in 2005, and 11 in 2006. The lowest point was just 10 last year. Insolvencies among p-c companies, which Standard and Poor's noted "historically make up the bulk of the total count," made up a lower percentage in 2007 (40 percent) than the 10-year average of 57 percent.

S&P also found that those insolvencies that did occur in 2007 were happening to companies of a much smaller scale. Based in filings, the total assets as of the end of 2006 for the top five insolvencies that occurred last year were just one-third of those for the top insolvencies of 2006. The insolvencies of 2007 were far greater, however, than those occurring in 2005.

The most recent peak for insolvencies was in 2000 when 56 companies were put under state supervision. That figure was cut in 2003, and fell to its lowest point last year.

The property and casualty sector has been assisted with improved balance sheets and increased capital via better earnings. It also has been assisted by enterprise risk management, improved premiums and the relatively low level of catastrophic losses in the past two years.

However, Standard and Poor's is doubtful the trend can continue. S&P said it believes the industry may have crossed a threshold, and that the conditions in the marketplace--including lower premiums, broadening coverage terms, increased competition and regulatory scrutiny--will make the trend of fewer and fewer insolvencies "unsustainable."

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S&P Notes Fewer Insolvencies In 2007

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