Seventy-five percent of survey respondents expect 2003 to be more profitable than last year, as measured by the combined ratio?the percentage of each premium dollar that property-casualty insurers spends on claims and expenses.

The combined ratio for 2002 is estimated at 103.3, based on a separate survey of a dozen Wall Street analysts in conducted by the Institute last year.

Asked if insurers thought the hardening of the p-c commercial market would continue through 2003, 81 percent thought it would. Ninety-two percent also thought the hardening of the personal lines market would continue through 2003.

I.I.I. noted that, broken down by lines of insurance, 70 percent of respondents expect auto insurance to be more profitable in 2003, most likely as a result of improved adequacy of rates.

Sixty-five percent of respondents predict the homeowners line to be more profitable than last year, despite the fact that only 38 percent believe that the mold crisis has peaked and that the pace of mold claims will decline.

Abuse of the tort system is a major concern confronting p-c insurers. According to Robert Hartwig, senior vice president and chief economist of the I.I.I., tort costs currently consume two percent of GDP or more than $200 billion per year, according year 2,000 data from Tillinghast-Towers Perrin.

"The current medical malpractice crisis epitomizes the problems in the U.S. tort system. Medical malpractice tort costs rose by 140 percent between 1990 and 2000, more than double overall growth in healthcare inflation over the same period," Mr. Hartwig said, quoting Tillinghast data again.

I.I.I. said despite widespread support from all industry sectors, only 23 percent of survey respondents think Congress will pass and President Bush will sign meaningful tort reform legislation in 2003.

Only 20 percent of respondents said they expect Congress to pass and President Bush to sign legislation in 2003 that will help contain the current asbestos crisis.

Eighty-nine percent of those answering the survey thought there would be an improvement in the workers' compensation market, yet only 12 percent expect an overall improvement in commercial lines.

"The current hard market was already well under way before September 11, and is likely to continue in 2004," said Mr. Hartwig. "Rates of return in the property-casualty insurance industry, while improving, are still only in the four-to-five percent range, well below the 10-to-15 percent typical of Fortune 500 companies.

Following the passage of the Terrorism Risk Insurance Act of 2002, 75 percent of survey respondents said they believe that it will be easier for businesses to obtain terrorism insurance coverage.

The Property-Casualty Insurance Joint Industry Forum was created to provide leaders from the widest spectrum of the industry with an opportunity to meet with each other in discussion of topics of general interest.

Forum participants included nearly 250 representatives from property and casualty insurance and reinsurance companies and organizations. Of these, roughly 40 percent responded to the survey.