Insurance analysts believe shifts in capital will result in overall premium growth in 2006, although their predictions are more cautious than they were late last year, according to the Insurance Information Institute's annual “Groundhog Forecast.”
The analysts surveyed believe premiums overall will rise 3.8 percent in 2006, up from an estimated 1 percent in 2005, noted Robert P. Hartwig, senior vice president and chief economist for the institute, in his report on the survey. The groundhogs' prediction is less bullish than the 4.7 percent estimate cited in a December survey of analysts by the industry-sponsored institute.
The increase will come about, according to Mr. Hartwig, because capital will be moved from the soft casualty market, creating a slight capacity crunch, and moved to the property and reinsurance markets, where prices are on the rise in the wake of last year's hurricane season.
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