P&C market strong until 2007, despite cat losses

Despite the devastating 2005 hurricane season along with an increasingly competitive market the property-casualty insurance industry is expected to enjoy relatively strong results from 2005 through to 2007, according to Conning Research and Consulting Inc.’s recent report “Property-Casualty Forecast & Analysis by Line of Insurance-Third Quarter 2005.”Conning analyst Clint Harris says Conning’s research indicates that “industry-wide property-casualty insurers will report strong results for the 2005-2007 period, with industry-wide ROE’s above 7%.””Property-casualty industry performance will degrade somewhat over the next three years due to increasing price competition, but it will still be strong by historical standards,” Harris adds.The report provides projections of key underwriting and financial results for the entire property-casualty industry as well as the major lines of business, including personal auto, homeowners/farmowners, commercial auto, workers’ compensation, commercial multi-peril, general liability, non-proportional reinsurance, medical malpractice, fire & allied, and inland marine.”Our detailed forecast for the property-casualty industry and its major lines of business has been modified in the third quarter edition with an increased expectation for losses,” Stephan Christiansen, director of research at Conning , says. “Conning’s forecast varies by line of business but generally assumes increasing competition in 2005 for most lines of business and accelerating price competition for a number of commercial lines in 2006, with a possible continuation to 2007 for some. While the catastrophes will mitigate price competition in severe windstorm exposed areas, the broader trend is toward continued softening.”