CONNING: LOOK FOR P/C UNDERWRITING PROFIT AGAIN IN 2005

The property/casualty industry can look forward to another year of underwriting profits, assuming normal catastrophic losses of $13-$14 billion, according to a new study by Conning Research and Consulting Inc. However, the analysis by Conning Research suggests that 2006 may not be as kind.

“Higher prices, tighter covers and more effective deductibles are the key contributors to industry performance in the 2004-2005 period,” said Stephan Christiansen, director of research at Conning Research and Consulting. “Despite a softening market, we fully expect that the underwriting profits of 2004 will continue at least into 2005.”

The Conning Research report, Property-Casualty Forecast & Analysis by Line of Insurance: First Quarter 2005, presents a three-year forecast for the key lines of business and the P/C industry as a whole.

“Of course, despite the stunning performance of personal lines, led byHomeowners, and the strong performance of a number of commercial lines, particularly Commercial Automobile, softening market conditions will ultimately begin to chip away at the industry’s record performance,” said Christiansen. “Our analysis suggests that 2006 will be the first year of deterioration.”