Reserve releases for U.S. P&C insurers through 2011’s third quarter totaled $11.4 billion—a 14 percent decrease compared to the same time period in 2010, according to Moody’s Investors Service.

The ratings agency also said in a Special Comment that while commercial lines still show overall redundancy, reserves for the most recent accident years (2009 and 2010) are likely deficient.

Moody’s says it expects accident-year 2011 reserve deficiencies in commercial lines to be equal to or slightly higher than 2010, and “that reserve releases will continue to decline as companies begin to recognize the deficient reserve position in standard commercial lines—particularly Workers’ Compensation and General Liability—for the most recent accident years.”

While commercial lines have seen modest pricing increases, Moody’s said average prices for standard commercial liability lines remain inadequate at current levels.

For personal lines, the story is different: Moody’s said significant redundancies remain, particularly in the most recent accident years, and that a “significant portion” of reserve releases so far this year have come from personal lines.

Within personal lines, Moody’s said redundancies are likely greater for Personal-Auto Liability than for Homeowners: “One reason for the larger redundancy is structural: Within the top 50 carriers, several large Personal-Auto writers have conservative reserving philosophies, which raises the estimated overall reserve redundancy for that line.”

The agency also said that high gas prices and high unemployment have resulted in lower road traffic, decreasing accident frequency. Accident severity, from a cost standpoint, is also lower as new-car sales are down due to the economy, and newer cars tend to be more expensive to repair.

Medical Professional Liability (MPL) is also seeing continued redundancies even in the most recent accident years. “MPL tends to have a pricing and reserving cycle that is partially independent of the cycle for standard commercial lines,” the agency said.

In contrast to the expected slowing of reserve releases for commercial lines, Moody’s says it expects personal-lines carriers and MPL writers to continue reserve releases for the medium term.