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Conning Research: P/C Industry Forecast Affected by Worsening Economic and Investment Income Outlook

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Posted on 13 Oct 2011

The downtrend in economic indicators, along with declining investment income projections are principal conditions guiding Conning’s latest Property-Casualty Forecast & Analysis edition.

“Conning’s 2011 premium growth forecast has decreased with the sliding economy to only 2 percent to 3 percent,” said Clint Harris, analyst at Conning Research & Consulting.  “The industry forecast combined ratio, north of 106 percent, includes additional deterioration in the underwriting results and adjustments for the record catastrophe activity of the second quarter. Of course we are closely watching second-half tropical storm results.”

The Conning Research service, “Property-Casualty Forecast & Analysis” forecasts line of business and industry growth and performance for 2011-2013.

The report is based on Conning’s proprietary property-casualty industry model and analysis of key industry drivers, data and reporting.

“The expected forecast drivers for 2012 and 2013 are stronger economic growth than in 2011 and expanding rate-firming in commercial lines, with negative offsets on investment income,” said Stephan Christiansen, director of research at Conning. “We forecast an increase in both exposure and premium rate growth for each year, but rate firming is short of what should be interpreted as a broad turn in the underwriting cycle. Certainly, the faltering economic recovery has worsened exposure growth expectations. However, the decline in expected investment yields for 2011 and for the next couple of years is becoming an even more significant factor driving industry expectations.”

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.


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