NU Online News Service, Aug. 19, 12:00 p.m.EDT

Moody's says second-quarter catastrophes took a toll on propertyand casualty insurer's earnings, but there are no signs that pricecompetition on the commercial side will let up anytime soon.

In a special commentary released yesterday, Moody'ssays rated carriers reported “respectable” net income numbersfor the second quarter at approximately $1.4 billion compared to$4.4 billion for the same period last year.

The results include $5.5 billion in pre-tax catastrophe lossesin the second quarter of this year compared to $2 billion ofpre-tax catastrophe losses last year.

“In aggregate, net written premiums were up against theprior-year level, with companies generally reporting rate increasesin personal lines, and increased exposures and flat to modestlyrising renewal rates in commercial lines,” says Enrico Leo,assistant vice president and author of the report, in a statement.“Nevertheless, competition for new business remains intense.”

Although renewal rates are up for somecommercial insurers, absent a large industry event, pricing forcommercial and specialty casualty insurance will improve onlygradually, says Moody's.

The rating service notes that renewal rates were flat toslightly up and retentions remained strong “for the majority ofcompanies.” The specialty markets are still competing with standardline carriers entering their market, but “there is some evidence ofmoderation” of rates in this segment.

The only place where rates are expected to increase noticeablyis catastrophe-exposed property coverage, the report says.

The report says net written premiums for the group of 23 ratedinsurers rose 7 percent to more that $44 billion. However, netincome for the group dropped 84 percent to $550 over last year.

The insurers included ACE, Allstate, Chartis, Chubb,Progressive, Travelers and W.R. Berkley.

Thirteen of the 23 companies reported second quarter combinedratios above 100 and the rest were above 90.

The exceptions were HCC Insurance Holdings at 89.2; ProassuranceCorp. at 71, and RLI Corp. at 89.

Twenty-two of the 23 reported increases in their combined ratioover the second quarter last year except Proassurance, a writer ofmedical professional liability insurance, whose combined ratiodropped 8.1 points.