Study Sees 10 Percent Premium Growth For P-Cs
NU Online News Service, May 9, 3:51 p.m. EDT?Fitch Ratings said today it estimates the combined ratio for the U.S. property-casualty insurance industry will reach 103.9 percent this year, down from 107.2 percent in 2002.
The New York-based ratings agency also forecast that the domestic p-c insurance industry will see a 10 percent growth in the premium volume this year.
This prognosis is in line with expectations from some other industry participants, who are also seeing a continuing decline in the industry-wide combined ratio.
Earlier this year an analyst survey by the Insurance Information Institute in New York forecast an industry combined ratio of a little over 103 and some 12 percent growth in net written premium for 2003.
James Auden, senior director at Fitch Ratings, suggested that following 2002–when insurers restored underwriting disciplines in response to the poor pricing of recent years–companies would continue to post improving operating results this year as well, barring any unusually large catastrophe losses.
The ratings agency also predicted that insurers will continue to focus on improving underwriting disciplines in the near term, since the investment results for the industry are unlikely to get much better any time soon.
Still, Fitch said it is maintaining its "Negative" rating outlook in the property-casualty commercial lines and reinsurance sectors, while its outlook for the personal lines sector remains at "Stable".
The ratings firm added that it expects a reduction in its ratings actions this year, but that there would still be more downgrades than upgrades. Also, Fitch warned that the expected improvement in the industry's underwriting performance is still insufficient to produce an adequate return on capital.
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