Rating and research firm Fitch Ratings says that in the U.S. at least, commercial lines is looking at a much more uncertain future than personal lines. Reinsurance prospects are also challenged, Fitch reports in “Review & Outlook: 2002/2003” for the p&c industry. Fitch’s outlook for commercial lines and reinsurance is “negative”, while personal lines is “stable”, assessments which have not changed since last year. “Pricing has improved for personal lines of the p&c insurance industry, such that rates are increasing at a faster rate than loss costs, and this trend should continue in the near term,” says Jim Auden, senior director at Fitch. “In the commercial and reinsurance segments of the p&c insurance industry, Fitch is looking for sustainable profitability improvement and diminished reserve deficiencies before shifting to a “stable” outlook.” Among the key events of 2002 included in the report are the lingering effects of September 11, U.S. terrorism insurance legislation, and continued deterioration of investment markets. Also, reserving issues, asbestos losses and “a stagnant mergers and acquisitions market” continue to trouble the industry. The p&c industry is expected to record the largest one year favorable swing in underwriting results in 2002 as measured by the combined ratio,” says Auden. “This change reflects sharp increases in premium rates and implementation of more conservative underwriting practices across all business lines.” This swing will also be the result of a light year for catastrophes in 2002, particularly compared to 2001, which was overshadowed by September 11.