Despite some grim property-casualty industry-wide results for the first nine months of the year, one of the insurance industry's premier economists and leading spokesmen views a net income loss for the full year as unlikely.

"It doesn't appear it [the insurance industry] will wind up with a loss for the year," remarked Robert P. Hartwig, president of the Insurance Information Institute.

His comments came the day after the Insurance Services Office and the Property Casualty Insurers Association of America reported that for the first nine months of 2008, the industry's net income after taxes dropped 91.8 percent to $4.1 billion, falling from $49.6 billion last year.

The industry also reported a net loss of $9.9 billion for the third quarter.

Mr. Hartwig pointed out that compared with the third quarter, underwriting losses for the fourth quarter will be much less.

Estimated net catastrophe losses, loss and loss adjustment expenses increased $10.3 billion, or 13.8 percent, to $85.4 billion in the third quarter of 2008, up from $75 billion a year earlier.

In addition to light fourth quarter catastrophe losses, Mr. Hartwig said investment returns for that period have been solid. However, there will be a net realized investment loss for the year and a net unrealized loss for insurer portfolios for the year, he noted.

In the event that the final tally for the year wound up with net income in the loss column, Mr. Hartwig said it would only be the second time the industry experienced such a result--with the first occasion coming in 2001, when insurers were impacted by a poor investment environment and the losses from the 9/11 terrorist attacks.

For the coming year, Mr. Hartwig said there are reasons for cautious optimism, adding it would be difficult to envision the financial environment remaining as difficult as it has been in 2008.

"It's quite unlikely we will see a [stock] market decline of the same magnitude," he said.

Mr. Hartwig said that interest rates would be lower, thus impacting bonds--which are insurers' primary investment income.

But if the economy expands in the second half of 2009, there should be opportunities for premium growth with increased sales in homes, autos and other lines, he added.

Special Reports /

P-C Sector Full '08 Result Should Avoid Net Loss

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