Two recent reports by the same analyst firm illustrate the unpredictability of the insurance-pricing cycle, as one report notes industry reserves are approaching inadequacy, while the other states that property-catastrophe rate increases, which had led the charge out of the soft market, appear to be slowing.
A Stifel Nicolaus report analyzing National Association of Insurance Commissioners’ data released through SNL Financial states that industry reserves remain adequate for now—but contends that insurers are “flirting with inadequacy,” with Workers’ Comp possessing the greatest risk of experiencing deficiencies.
Reserves were weaker at year-end 2011 compared to 2010, Stifel Nicolaus notes. According to firm analyst Meyer Shields, the $573.7 billion in consolidated industry reserves at the end of 2011 stands just $5 billion above what the firm determines to be the minimum adequate reserve level.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
