Conning provides its latest Property-Casualty Forecast extending into 2014. An extended low interest rate environment and a sluggish economic recovery pairs with some moderate firming of pricing to yield weak returns but modest and improving growth, according to the most recent edition of Conning's Property-Casualty Industry Forecast & Analysis.
"Conning's 2012 forecast is for net premium growth over 2011 approaching 4 percent, as insurers benefit from a more stable economy and modest firming in commercial lines pricing," said Stephan Christiansen, director of research at Conning. "A continued steep decline in portfolio investment returns should be stimulating greater price firming, but lower renewal retention rates observed by some insurers imply that competitive pricing is still hindering rate growth. Loss cost inflation, while moderating, remains a significant risk worthy of constant monitoring and management. The 2012 forecast combined ratio, of above 103 percent, includes a projected average annual natural catastrophe loss of about $20 billion."
The quarterly Conning Research service, "Property-Casualty Forecast & Analysis" forecasts industry and line of business growth and performance for 2012-2014. The report is based on Conning's proprietary property-casualty industry model and analysis of key industry drivers, data and reporting.
"Looking further out, sustained economic growth and underwriting cycle firming drive our forecast for premium growth approaching 5 percent in 2013 and 5.5 percent in 2014," said Stephan Christiansen. "The moderating combined ratio falls below 103 percent by 2014 assuming a sustained slow firming of the underwriting cycle. Our projected ROE's are continuing below 5 percent through the projection horizon."
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.