The U.S. property-casualty industry incurred a $2.8 billion underwriting loss for the first nine months of 2005, according to a recent study by A.M. Best & Co.
According to the Oldwick, N.J.-based rating firm's analysis any hardening of prices brought on by the loss does not appear long-lived.
Best said the most expensive natural catastrophe in history helped turn the $3.4 billion gain for the nine-month period in 2004 to red ink last year, the company said.
In addition to the $38.1 billion of insured losses incurred by Hurricane Katrina, as measured by the Property Claims Service unit of the Insurance Services Office, the season also saw several other hurricanes that contributed to the underwriting loss.
"Before Hurricane Katrina, rate decreases and competition on many lines began to emerge," the report stated.
But that trend started to dissipate following Katrina, particularly on those lines affected by the hurricane. "While this rate environment will have a positive impact on future results, we believe the retreat from rate decreases will be short-lived," the report said.
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