P/C INSURERS’ DEFICIENCY DOUBLES

Despite the property and casualty industry’s best efforts to have rates keep pace with losses, results are deteriorating, according to new study by Conning Research & Consulting Inc. In fact, Conning estimates that the reserve deficiency has more than doubled from just a year ago, further straining P/C insurers’ ability to cover the rising cost of claims. Conning’s most recent study, “Property-Casualty Reserve Adequacy: Digging Dipper,” finds that even though industry reserves were increased by more than eight percent in 2002, the increase was insufficient to strengthen the reserve position. Price increases, stricter underwriting guidelines, and greater loss controls apparently have yet to offset poor underwriting results. The total reserve deficiency of the nine P/C carriers studied amounted to $38.5 billion, compared to $16 billion the previous year. More information on the report can be found at Conning’s Web site: www.conningresearch.com.