Conning Positive On Home Insurance

Conning Positive On Home Insurance

NU Online News Service, Dec. 20, 2 :22 p.m. EST?A positive outlook for the homeowners insurance market until 2008 is foreseen by Hartford, Conn.-based Conning Research and Consulting.[@@]

The firm, noting two decades of poor financial results for the sector, voiced optimism in a report titled "Homeowners Insurance: The 'Curse' Is Reversed Until 2008."

According to the study, property-casualty insurers will have a combined ratio of 104.5 in 2004 despite some of the worst catastrophe losses on record.

"The outlook is bright for 2005-2007, due to a favorable underwriting environment and a surge in insurer sophistication," said Conning.

Bruce Hale, an analyst at Conning, noted the p-c record was one of losses, "often with new causes emerging just as older causes appeared to be solved."

Insurers, said Mr. Hale, brought many of these problems upon themselves and while some remedial actions began in the mid-1990s, "the rewards only became noticeable in the profitable 2003 results."

The Conning study predicts an end to the recovery by 2008, since some of the current favorable factors are temporary opportunities. The turnaround, the consultants said, will then be replaced by the old, margin-squeezing business cycle.

"While the homeowners recovery is impressive, it appears that, overall, the line will revert to traditional market cycle dynamics," said Stephan Christiansen, Conning research director.

Mr. Christian said that "by analyzing those same dynamics, effectively managed market leaders can succeed in avoiding the pitfalls and ensuring their long-term returns."

The report can be purchased from Conning Research & Consulting, Inc., by calling (888) 707-1177 or visiting the company's Web site at www.conningresearch.com.
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