In speaking with A.M. Best, Dr. Hartwig underscored his comments of late last year, saying that although the economic growth of 3% to 3.5% this year will be good news for the property/casualty industry, it's premature to speak of a market hardening. Rather than a hardening, Hartwig prefers to speak of the market firming beginning next year through 2014.
"We will frequently hear people [ask] ... when is the next hard market going to be?" said Dr. Hartwig. "And by that they typically mean double-digit increases across the board in premium growth for a sustained period of time. There's nothing now that would serve as a catalyst to get us there."
However, as the economy continues to recover from the Great Recession, Dr. Hartwig said some parts of the P/C insurance industry, such as workers' compensation, will realize the benefits from the expanding economy sooner than others.
"While the number of new jobs that have been created so far is somewhat disappointing, the reality is this has translated into tens of billions of dollars in new payroll, and payroll is exposure base for workers' comp," said Hartwig.
The latest employment report released by the U.S. Bureau of Labor Statistics showed a gain of just 36,000 jobs in January, yet a fall in the unemployment rate to 9.0% from 9.4%.
In addition, improvement in the commercial automobile market will drive demand for commercial general liability coverages, Dr. Hartwig said.
Even more importantly, the number of commercial bankruptcy filings dropped from some 61,000 in 2009 to the "high fifties" in 2010, Hartwig said.
"The drop in corporate bankruptcies, which is probably down about 5% in 2010, will drop substantially in 2011. And this is going to help preserve exposures," Dr. Hartwig said.
On the personal lines side, Dr. Hartwig said consumers are feeling confident enough to start buying more new cars, which will translate into a higher average premium for auto insurers, but new home construction is still "stuck in the mud."
Hartwig noted last year was a particularly severe year for winter-storm losses, with about $2.6 billion in insured losses, and winter storms have hammered large parts of the country this year.
"It's been a very severe year so far, and it's quite possible that those numbers could ultimately rival the numbers we saw in 2010," Dr. Hartwig said. "This is somewhat unusual but we did see a similar pattern back in the mid-1990s."
And, while the industry experienced no significant hurricane-related losses in the past few years, Dr. Hartwig said losses related to thunderstorms, including damage from hail, have been at record highs for the past three years.