While commercial-insurance rates are on the rise, other factorscould pressure fourth-quarter earnings for specialty and Bermudainsurers, according to an analyst's report.
|Stifel Nicolaus says the combination of dwindling reserves,loss-cost inflation and Superstorm Sandy losses will put pressureon underwriting margins for specialty insurers and Bermudaunderwriters. Low interest rates from fixed-income investments willalso put pressure on margins, says the analyst.
|Fourth-quarter earnings per share are expected to be negativefor most companies the analyst covers, with the exception of RLI,W.R. Berkley and ACE.
|Turning to publicly held insurance brokers and primary-insurancecarriers, Stifel Nicolaus is a little more upbeat, pointing to howpremium increases should help with fourth-quarter performance.
|Investors view the personal and commercial lines carriersfavorably, despite losses from Sandy, as pricing trends areimproving, Stifel Nicolaus says.
|Insurance brokers are expected to see the most benefit from rateincreases and an improving economy. All of the five publicly heldinsurance brokers the analyst covers are expected to reportpositive fourth quarter results.
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