Following a profitable year for the industry, the P&Cinsurance market will be stable and competitive in 2014, accordingto Wells Fargo's Insurance 2014 Insurance Market Outlook. Thereport, issued by Wells Fargo Insurance, covers a range of productsegments from workers' compensation and employment practices, toproperty and technology and network security.

“We anticipate significant marketplace capacity, excellentcoverage quality in many areas, and do not expect a lot of pricingvolatility,” says Simon Hodge, head of the Professional Risk Groupat Wells Fargo Insurance.

Analysts provide a positive view of what the year might hold forthe workers' comp line. In the report, they project continued rateincreases for the first three quarters of 2014 along with continuedreduction in the combined ratio, resulting from higher prices seenover the past three years.

Other predictions for workers' comp include:

• Expected moderation in rate increases in Q4 resulting in flat to5% increases.

• Moderate reserve releases will further increaseprofitability.

• Continued movement away from guaranteed cost program structuresinto higher deductible program structures, either because they area more appealing alternative or a necessity.

• Insureds with guaranteed-cost program structures or poor lossexperience will see 10% to 20% increases, with higher increases inproblematic states, such as California and New York.

• Insureds with low deductibles will see 5% to 15% increases.

• Insureds with high deductibles will see 0% to 5% increases.

• The continued use of predictive modeling analysis to improverisk selection, proper retention levels, and pricing will result inmore conservative underwriting by the insurers.

In property, the U.S. market is characterized as very stable,with abundant capacity. Property insurance carriers have beenlowering prices for select accounts (particularly for those withexceptional loss history), the report says, but they have been andwill likely continue to be reluctant to offer discounts across theboard.

Underwriters will still try their best to get higher rates foraccounts with poor claims experience, Wells Fargo adds, noting thatcarriers are still focused on natural catastrophe perils includingflood, windstorm and, to a lesser extent, earthquake.

Despite lower reinsurance prices, the cost of propertycatastrophe insurance is expected to remain flat to only slightlydown, says Wells Fargo, with insurers focusing on such specifics asgeographic location, loss history and the overall quality of therisk.