Surplus lines insurers whose 2007 direct premium written dropped for the first time in 11 years can expect profits to fall as the trend will continue, says a new report from A.M. Best Co.
The Oldwick, N.J.-based rating firm said the nonadmitted carriers overall outperformed the property-casualty industry in underwriting and operating performance, but declining prices and more aggressive competition foretell deterioration in the bottom line as premium levels decline.
Last year the sector's direct premium written fell by 3.5 percent. It was the first decline since 1996, when the line was off by 0.4 percent. The p-c market during 2007 eked out a 0.5 percent gain in direct premium written.
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