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Conning Research: Anemic Premium Growth Forecast for 2010, Up in 2011-2012


Posted on 21 Jul 2010

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While property-casualty personal lines premiums are benefiting from rate growth, commercial lines continue to show softness, and will lag the economic recovery, according to the most recent Property-Casualty Industry Forecast by Conning Research & Consulting.

"Our expectation is for anemic premium growth overall in 2010--weaker than GDP growth--as exposure growth lags economic recovery,” said Clint Harris, analyst at Conning Research & Consulting. “Personal lines products are indicating premium growth that is supported by premium rate growth. In contrast, commercial lines prices continue to show softness, and our commercial premium growth projections in 2011 and 2012 assume that underwriting results will likely get worse before they get better."

Conning Research’s “Property-Casualty Forecast & Analysis” service forecasts industry growth and performance by line of business for 2010-2012. The report is based on Conning’s proprietary industry forecast model and analysis of key industry and economic drivers as well as statutory data filings, public insurer reported results, and 2010 catastrophe loss estimates to date.

“Our 2010 property-casualty industry forecast is for net premium growth of 1.4 percent. Although positive, this is much weaker than the forecast real GDP growth rate of 3.3 percent,” said Stephan Christiansen, director of research at Conning. “We project a combined ratio increase of about 1.9 points, with an estimated average annual catastrophe loss of about $19 billion, due to deterioration in the loss ratio because of eroded premium rate adequacy. In sum, for 2010 we project an increase in the property-casualty industry’s implied return on equity from 5.7 percent to 6.8percent, largely driven by an expectation for positive realized capital gains.”

Conning’s “Property-Casualty Forecast & Analysis” is available for purchase from Conning Research & Consulting by calling (888) 707-1177 or by visiting the company’s web site at www.conningresearch.com. About Conning Research & Consulting Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers. Conning Research & Consulting has published independent insurance industry research for 50 years, including market coverage of 30 segments of the industry in addition to industry forecasting and identification and analysis of major strategic issues. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth analyses on a wide range of industry products and issues. Conning is headquartered in Hartford, CT.


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