Relatively modest recent losses will result in a healthy fourth quarter for the property-casualty insurance industry, an analyst is forecasting.
Brian Meredith, with Bank of America, said in his fourth-quarter earnings report to investors that “except for reserve loss development from hurricanes, we do not expect much adverse loss development in the sector.”
As for commercial lines, Mr. Meredith said that price stability in property insurance lines and a moderation in casualty lines in the fourth quarter are also favorable signs.
“Underwriting margins, excluding the impact of Hurricane Wilma, will be very attractive and may result in better than expected earnings for some companies,” he wrote.
Rate increases will be focused in national account property, property business on the Gulf Coast, and the marine and energy business, according to the analyst.
Mr. Meredith takes a more pessimistic view of personal lines where “auto insurers will continue to experience a gradually spread compression between premium rate increases and loss-cost inflation, in our view.”
He wrote that he believes this will show up in both excluded-catastrophe accident-year combined ratios and in management's discussion of how competitive the market is.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
