NU Online News Service, Jan. 13, 9:46 p.m.EST

NEW YORK—Three-quarters of executives surveyed at theProperty/Casualty Insurance Joint Industry Forum here say theindustry can expect an improvement in profitability in 2012.

Profits will improve in most P&C lines, according to theInsurance Information Institute survey, with 63 percent sayingthere will be an improvement in auto lines and 67 percent expectingan uptick in profits in homeowners' lines.

More than 70 percent of the nearly 250 survey respondents expectan improvement in commercial lines, but a majority (55 percent)says not to look for any upgrade in the workers' compensationline.

According to Steven Weisbart, senior vice president with theInsurance Information Institute, the U.S. economy is expected togrow at a little over a 2 percent annual rate, net ofinflation.

“The industry is well-capitalized to provide this additionalcoverage and to pay claims under it without difficulty,” he says instatement. “Rates will be determined, as they should be, by state-and local-level market conditions, recognizing the impact ofinflation on claims and the effect of lower investment income thanthe industry has earned in prior years.”

More than two-thirds of P&C leaders expect higher premiumgrowth in 2012. Just 2 percent thought premium growth will benegative this year.

Though 78 percent of survey takers believe the industry'scombined ratio will be lower in 2012 (It was 108.2 after ninemonths in 2011), not many think consolidation among insurers andreinsurers will part of the reduction. More than 70 percent saythey do not expect an increase in consolidation.

Natural catastrophes obviously played a large role in knockingdown insurers' profits in 2011, but low interest rates and diminvestment gains also contributed.

Just 19 percent say interest rates will rise in 2012 while 78percent say interest rates will stay flat. Turning to the equitymarkets, 75 percent expect an up year.

Two-thirds of leaders taking the survey at the forum say it istoo early to tell if the Federal Insurance Office is off to a goodstart.