Earned premiums grew by 5.5 percent, says Fitch, although the ratings agency notes “the reported totals were slightly skewed by three separate merger and acquisition events that took place over the past year involving Markel Corp., Alleghany Corp. and Validus Holdings, Ltd.” After adjusting for the transactions, Fitch says net-earned premium growth was 4.7 percent.

Overall favorable impact from prior-year reserve development was essentially unchanged in 2013's first half compared to the year before, says Fitch. Only seven insurers in Fitch's group reported adverse reserve development, with Meadowbrook Insurance Group seeing the greatest impact.

“Fitch continues to believe that after recognizing significant reserve redundancies over the last five years, the P&C industry loss-reserve position is gravitating toward adequate levels,” the report says.

Expense ratios, which “rose significantly in the economic recession of 2008-2009,” were essentially unchanged for 2013's first half compared to the year before. Fitch says, “Expanding regulatory and compliance obligations, as well as technology investments to bolster risk management and pricing capabilities, are contributing factors limiting expense ratio improvement.”

The ratings agency says as rate increases slow and investment contribution to earnings remains limited, “insurers are likely to look at rationalizing expense levels going forward to maintain profitability.”