A joint report issued by three major industry organizations notes that net losses and loss adjustment expenses increased significantly in 2007.
The report, issued by ISO, the Insurance Information Institute (I.I.I.), and the Property Casualty Insurers Association of America (PCI), noted that overall net loss and loss adjustment expenses in 2007 increased more than five percent when compared to results found in 2006, going up from $283.8 billion to $298.6 billion. That comes out to an increase of almost $15 billion.
Those results are particularly distressing because the scope and severity of catastrophes in 2007 were much lower than in 2006. Including additional development of losses from the catastrophic hurricanes of 2005, ISO estimates that the net catastrophe losses included in insurers' financial results fell to $6.9 billion in 2007 from $11.8 billion in 2006. So why the increase in adjustment expenses?
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