NU Online News Service, Dec. 13, 12:15 p.m. EST

Reserve releases that have cast a smokescreen in front of negative earnings in commercial lines will dwindle as the industry's reserve margin worsens, Moody's said.

According to Moody's Weekly Credit Outlook, "Conditions now are lining up for a meaningful deterioration for the commercial lines sector" since loss reserves are predicted to be at break-even levels. Therefore, more releases may lead to deficiencies, wrote Paul Bauer, Moody's vice president and senior credit officer.

Mr. Bauer said the commercial industry looks to be heading toward a pricing "double dip" instead of a recovery as an accelerated decline in commercial pricing was reported by MarketScout in November.

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