U.S. property/casualty industry in early stages of hard market: III

Experts in the U.S. property and casualty industry believe the worst of the financial crisis is over and that the industry is now in the early stages of a hard market, reported the Insurance Information Institute (III).
The III surveyed 40 executives from the P&C industry at its 16th Annual Property/Casualty Insurance Joint Industry Forum.
Of those surveyed, 72% believe the industry is on the road to recovery.
A majority also believe profits will improve in most P&C lines. Broken down by lines: 63% believe there will be an improvement in personal auto; 67% expect an improvement in homeowners; and 72% anticipate improvement in commercial lines.
Seventy-eight per cent of respondents believe the combined ratio will be lower in 2012 than in 2011 (the combined ratio in the first nine months of 2011 was 109.9%, excluding mortgage and financial guaranty insurers).
“The consensus among forecasters is for growth of the U.S. economy in 2012 at a little over a 2% annual rate, net of inflation,” said Dr. Steven Weisbart, senior vice president and economist with III.
“In that scenario, the demand for property and casualty insurance will increase modestly, both in terms of personal and commercial coverages,” he said.
“The industry is well capitalized to provide this additional coverage and to pay claims under it without difficulty. Rates will be determined, as they should be, by state- and local-level market conditions.”