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Conning Predicts Another P/C Profit for 2005

According to a new study by Conning Research and Consulting, the property-casualty industry can look forward to a profitable 2005, barring any abnormal catastrophic losses...
May 17, 2005

According to a new study by Conning Research and Consulting, the property-casualty industry can look forward to a profitable 2005, barring any abnormal catastrophic losses beyond the anticipated $13-14 billion. "Higher prices, tighter covers and more effective deductibles are the key contributors to industry performance in the 2004-2005 period," said Stephan Christiansen, director of research at Conning Research and Consulting. "Despite a softening market, we fully expect that the underwriting profits of 2004 will continue at least into 2005."

Conning predicts personal lines are going to fare better than commercial lines in the coming year. Personal lines are expected to have a combined ratio of 94.2 in 2005 and likely maintain a combined ratio less than 96 in 2006, but that commercial lines will see their combined ratio deteriorate to more than 100.

The Conning Research report, Property-Casualty Forecast & Analysis by Line of Insurance: First Quarter 2005, presents a three-year forecast for the key lines of business and the P-C industry as a whole. Many insurers use the quarterly Conning Forecast as a benchmark for planning purposes. "Of course, despite the stunning performance of personal lines, led by Homeowners, and the strong performance of a number of commercial lines, particularly Commercial Automobile, softening market conditions will ultimately begin to chip away at the industry's record performance," said Christiansen.""Our analysis suggests that 2006 will be the first year of deterioration."

Conning Predicts Another P/C Underwriting Profit for 2005 (Conning 5/10/05)

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