Global non-life premiums up, but underwriting results continue to deteriorate: Swiss Re sigma study

According to Swiss Re’s latest ‘World insurance in 2010′ sigma study, world non-life insurance premium volume increased by 2.1% in 2010 due to improved capital and solvency in the insurance industry.
At the same time, underwriting results deteriorated, signaling a potential turn in the underwriting cycle, the sigma study notes.
sigma noted the increase in premium growth was explained partly because a strong economic rebound increased demand for insurance cover in emerging and newly industrialized Asian countries. “Premium volume rose in Europe and the U.S. as well,” sigma says. “Industry capital continued its positive development and rose to a record high in 2010.”
But underwriting results deteriorated in the United States, and turned negative in large European markets.
“In the eight largest markets, premium income did not fully cover claims payments and other costs for the second year in a row,” sigma observes. “The average combined ratio of these leading markets worsened to 103%, compared to 101% in 2009.
“Given recent catastrophe loss events, it is clear that global underwriting results will deteriorate further in 2011. This indicates that prices are inadequate.”
Daniel Staib, one of the authors of the new sigma study, adds: “In some markets, such as Italy and the U.K., rates began to mount, most notably in the personal motor business, signaling that the underwriting cycle is at long last beginning to turn.”