While that proportion was similar in 2000, when the firm said that 70 percent of the 30 insolvencies in that year stemmed from reserve issues, both percentages jumped significantly from historical levels. Best said that the insolvency rate from insufficient reserves has historically ranged from 30-to-35 percent.

Best also said that there were only seven p-c insolvencies in 1999 and 18 in 1998.

A.M. Best's insolvency report is the third report released by a rating agency on the subject this year.

In January, Weiss Ratings in Palm Beach Gardens, Fla., reported 34 p-c failures for 2001, compared to 27 in 2000.

In April, Standard & Poor's in New York said property-casualty failures numbered 24 in 2001, down 23 percent from 31 failures in 2000.

While the three reports each offered slightly different insolvency counts, even analysts at S&P, which reported a decline in insolvencies last year, put reserve issues high on their list of concerns for the industry.

During a conference call earlier this week, S&P analysts, who were discussing the firm's 2002 Mid-Year Outlook reports (first released at an S&P Insurance Conference in early June), said that reserve additions did not end with the "kitchen-sink" fourth quarter of 2001.

(During the fourth quarter, a number of insurers and reinsurers added to reserves and dumped other charges into their earnings reports, causing many analysts to refer to the quarter as a "kitchen-sink" quarter.)

Fred Sklow, who discussed the commercial lines segment during the conference call, said that S&P expects reserve additions this year related both to the World Trade Center event and asbestos liabilities.

Although S&P's estimate of the shortfall in reserves for asbestos claims is at the low end of a widely-reported range of $20-$40 billion, Mr. Sklow said that S&P expects asbestos reserves to be strengthened by $5-to-$10 billion in 2002.

Laline Carvalho, an associate director, who reported on the reinsurance sector, added that the p-c industry is also grappling with issues related to professional liability coverage, including directors and officers, where "the industry's reserves in no way resemble adequacy."

Don Watson, director of insurance ratings, who moderated the call, commented on workers' compensation reserves in S&P's written report on the property-casualty sector. Noting that the National Council on Compensation Insurance puts reserve deficiencies for workers' comp at $21 billion, he said in the report that number "should mark the floor for where the true shortfall lies."

In a report on financial results for 2001 released late last month, A.M. Best said that adverse development for all lines amounted to $11.4 billion last year.

In its more recent report on insolvencies, predicting that the pace of downgrades to "E" (under regulatory supervision), would remain high this year, Best said that the commercial lines market is likely to face a greater number of insolvencies than either the personal lines or the reinsurance segments.

"Underpricing and under-reserving have been more egregious in the commercial segment than in personal lines, and reinsurers generally have strong parental support," Best reasoned.