Insurers are increasingly looking at their market pricing cycle as they plan their investment strategies, according to new research from Conning Research and Consulting Inc.
The company unveils its findings in a new study, titled "Property-Casualty Investment Survey & Analysis: Emerging Cycle Of Opportunities," which analyzes the trends of property-casualty insurance company investments and the conditions of the industry.
The study, conducted through a survey of insurance company executives, also includes a breakdown of company investment profiles based on size and underwriting peer groups.
Clint Harris, an analyst at Conning, said, "Regardless of size or underwriting focus, p-c insurers adjusted their investment portfolios in response to cycles in the underwriting and economic conditions from 2000 to 2004."
He added, "We may now be seeing the beginnings of a more profound change in investment strategies as a result of enterprise risk management. However, hard data indicate that underwriting cycle management is still the catalyst behind most changes in allocation among principal investment classes."
In 2004, companies were moving toward higher return investments as the underwriting cycle was softening, according to Conning managing director Scott Daniels.
"With a forecast of generally waning hard market underwriting conditions in 2006 and softer conditions in 2007, insurers may focus more on investment returns to keep company profits from sagging," he added.
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