Mr. Buckley spoke at the New York company's teleconference this week at which the rating firm reviewed 2003 and offered predictions for the next 12 months.

Mr. Buckley noted that generally "I think it's safe to say we are looking for a continued recovery in the industry performance, reflecting the hard market condition, and from the top-line perspective we think premiums will be up about nine percent in 2003 and about six percent in 2004."

Overall, the industry is expected to show a "significant recovery in profitability" this year, following modest profits last year and its worst operating year ever the year before, he said. "Consecutive rounds of sharp increases in premium rates and implementation of more conservative underwriting practices across nearly all business lines have improved market fundamentals," Mr. Buckley said.

Now is "a fascinating time to be an insurance industry observer" with so many different and opposing factors tugging and pulling at each other, Mr. Buckley told industry participants, but in general, "we think most market segments are now probably about adequately priced." He added that the firm's "crystal ball" views 2004 as the year rates will start softening.

But it's Fitch's position that when the marketplace ultimately softens, it will soften at "markedly different rates, business line by business line." This will be quite a change from the emergence of the hard market "which came in broad, headline fashion after the events of Sept. 11, 2001," Mr. Buckley noted.

"The soft market," he said, "will be harder to detect and may sneak up on many industry participants. So that means, for industry observers, you have to recognize that different companies will be affected at different paces, depending on their mix of business,"

Currently, Fitch's median insurer financial strength rating in the p-c sector is "A-plus," while its median senior debt rating is "triple-B-plus," Mr. Buckley observed.

Mr. Buckley also noted that the "biggest near-term concern" for the industry continues to be reserve adequacy. "We have seen up to $10 billion of adverse development in the first three quarters of 2003, and we are looking for about 15-or-so billion dollars for the full year, as insurers continue to play catch-up."

About a month ago, Fitch held a teleconference on the reserving issue, "and there we mentioned that as of year-end 2002, we thought the overall deficiency for the industry ran in the $46 billion-to-$77 billion range, which represents some 11 percent to 19 percent of reported reserves," Mr. Buckley commented.