* The U.S. property/casualty industry posted its fourth consecutive year of favorable reserve development in 2009, despite the danger of softening rate adequacy in many lines of business.
* A.M. Best expects the total industry to continue to report reserve releases for the 2010 and 2011 calendar years, although at a declining rate.
* Ongoing reserve releases will continue to benefit calendar year operating results but will threaten the adequacy of the underlying loss and loss-adjustment expense (LAE) reserves.
* Reserve positions vary dramatically by line of business, reflecting the differing impacts of tort reform, medical inflation, the economy, claim frequency, risk management and price competition.
* The bulk of the industry’s total all lines non-A&E reserve deficiency is derived from accident years 2003 and prior; the total deficiency associated with these accident years is $26.8 billion.
* The deficiency estimates provided are based on the assumption that future levels of inflation will be commensurate with recent historical levels; any sudden increase in inflation could result in much higher deficiencies.