NU Online News Service,Jan. 14, 12:40 p.m. EST

A majority of industry leaders at theProperty/Casualty Insurance Joint Industry Forum said they expectan improvement in personal auto and homeowners insurance profitsthis year, but many more believe improvements are not coming inworkers’ compensation or commercial lines.

Nearly 60 percent of respondents to anInsurance Information Institute survey conducted at the event inNew York City on Jan. 11 look forward to improved profits in auto,and 61 percent said the same for homeowners, but 86 percent do notsee progress for workers’ comp and 76 percent don’t expect anincrease in profits for commercial lines.

The results fall in line with recent commentsby industry executives. At the forum, Liam E. McGee, chairman,president and chief executive officer of The Hartford FinancialServices, said middle-market commercial insurance pricing “is notrational right now.”

Kristian P. Moor, president and CEO of Chartis,said workers’ compensation is underpriced. He said the company wasexiting the market and would continue to do so.

Last November, Liberty Mutual CEO Edmund “Ted”Kelly said the way commercial insurance is written is“patent nonsense” and it is “run irrationally.” He called workers’comp insurance a “time bomb on the balance sheet of theindustry.”

In the I.I.I. survey, slightly more than halfof respondents, 53 percent, think premium growth will remain flatand 57 percent of survey participants believe inflation willaccelerate in 2011.

Steven Weisbart, senior vice president andchief economist for the I.I.I., said continued low interest ratesin 2011 “will challenge insurers to price risks in closer relationto their claims potential.” The rate of bankruptcies may drop, butthey will still be apparent in 2011 so “the demand for commercialinsurance in 2011 will rise from a smaller base than wouldotherwise have been the case,” Mr. Weisbart added.

Interestingly, industry leaders were split50-50 when asked if the new Federal Insurance Office was a positiveor negative for the industry.