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Industry Results Driven by 2009 Recessionary Conditions, Turnaround Expected in 2011

Source: Conning Research & Consulting

Posted on 13 Jul 2009

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According to the most recent Property-Casualty Forecast & Analysis by Conning Research and Consulting, results for the property-casualty industry over the next few years will be driven by the 2009 recession, mixed insurance premium pricing momentum, and modestly deteriorating underwriting results.

“The combination of continued price decreases in most commercial lines of business, and the recession suppressing exposure growth, continues a string of negative premium growth for 2009 that began in 2007,” said Clint Harris, analyst at Conning Research & Consulting. “But recessionary conditions also can suppress losses, including reduced frequency from fewer exposure units and reduced loss severity due to deflation in some property loss cost drivers. In combination, we see a trend of moderate deterioration in the combined ratio through 2010, and modest improvement beginning in 2011--excluding unusual catastrophe experience or further turmoil in financial guaranty lines.”

The Conning Research study, “Property-Casualty Forecast & Analysis” forecasts industry growth and performance for 2009-2011. The report is based on Conning’s proprietary industry model and analysis of key industry drivers as well as first-quarter 2009 and previous statutory data filings, public insurer reports on first quarter results, and 2009 catastrophe loss estimates to date.

“Looking beyond this year, an expected slow economic recovery in 2010 and a return to more robust growth in 2011 lead to an increase in both premium and loss exposures, but also may include the start of an acceleration in inflationary factors that drive loss severity,” said Stephan Christiansen, director of research at Conning. “We see indications of price firming in personal lines, but continued mixed conditions in commercial lines. Capital conditions remain strong, particularly in commercial lines, and it is likely that further stresses will have to occur before any significant broad-based change in pricing will emerge.”

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

About Conning Research & Consulting

Conning Research & Consulting provides insurance industry analysis to insurers and industry stakeholders. Its published research includes 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. The Conning name has represented excellence in independent insurance industry research for 50 years. Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers.. Conning is headquartered in Hartford, CT.