A new report by Conning Research & Consulting offers a "gloomy" view on growth prospects for the property and casualty industry, and an industry analysis from Keefe, Bruyette & Woods (KBW) suggests insurers reconsider cost reductions, including reducing salary, to improve profitability in the face of economic and market challenges.
In its "Property-Casualty Forecast & Analysis" report, Conning says a concern is that after the compression of revenues in recent years, many anticipated a rebound in both the economy and in interest rates by now, neither of which has occurred.
"Not only has the economy faltered, but concern about the economy has increased," explains Clint Harris, analyst at Conning. "The government has been trying to recharge the U.S. economy by keeping interest rates low enough to encourage investment. The consequence of all of this is that bond yields have gone lower, and that is a significant driver in revenue for insurers.
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