Hard Market Could Arrive By 2012 As Reserve Releases Decline

As more evidence accumulates that insurers are using less reserves to augment earnings, pressure will mount on underwriting and force carriers to begin raising rates by near double-digit figures in 2012, according to a financial analyst.

In a report analyzing reserve releases among publicly traded insurers, Meyer Shields, with the firm Stifel Nicolaus, said his review of 49 insurers’ fourth-quarter earnings results reveals the aggregate reserve release declined by 300 percent on a year-over-year basis.