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The property and casualty insurance industry continued to have sufficient reserves through 2009, though adverse development of older-year losses and a downward trend in premium growth could reverse favorable reserve strengthening trends in the future, according to a Conning Research & Consulting report.
The industry's 2009 reserve position strengthened slightly, Conning said, despite $18.6 billion in reserve releases for the year. "In our view, the [p&c] industry reserve position has improved slightly in 2009, when compared with our previous analyses," said Stephan Christiansen, director of research at Conning.
But the Conning report, titled "Property-Casualty Loss Reserves: A Margin of Safety, But Is It Enough?" notes that the industry's premium growth, the primary source of funds for reserve strengthening, has continued its downward trend due to the ongoing soft market.
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