As a whole, he said that employment in the P&C industry was down almost five percent since the recession began, nearly matching the 6.1 percent decrease in employment in the overall U.S. economy.

For claims professionals, however, the news was grimmer, as statistics show the adjusting profession is taking the biggest hit.

"We have seen a very, very sharp drop in the claims adjusting area, the sharpest drop of all P&C positions in percent terms, around 14 percent since the recession began," said Mr. Hartwig. "I do not know precisely what the driver of this is at this point, but the number of people employed in the claim adjuster position today is roughly where it was in 1995."

Hartwig had bad news for claims trends in auto lines, too. Although he said a decrease in frequency is offsetting increases in severity for the most part, the same cannot be said for no-fault states.

"The big problem in no-fault states is that we're seeing an increase in both severity and frequency, particularly in states like New York, New Jersey, Florida, and Michigan," he said.

"It's a billion dollar problem in the U.S. Average no-fault claim severity in Michigan is $31,000 per claim. Michigan has an unlimited no-fault benefit. If you have an unlimited benefit, you're going to have unlimited costs," he noted.

"States like New Jersey and others have very high thresholds, and the problems are almost always due to fraud and abuse," continued Mr. Hartwig. "Something needs to be addressed, and the industry is working on solutions in these states."

Mr. Hartwig made remarks on other issues and areas of concern for the p&c industry, including:

o A decrease in investment incomes. "Where does the money come from to pay claims? Some of it comes from premiums, but a substantial amount comes from investment earnings, and those are way down. Regulators will not necessarily accept the fact that rates might need to be higher in order to offset the reduction in investment earnings. That means insurers must operate with a degree of underwriting discipline that they have not exhibited in more than 30 years."

o Regulatory overreach. "The principle concern in the P&C industry today is that we will be swept into a vast regulatory overhaul that is designed to prevent the failure of large banks....The core activities of insurers have no systemic relevance. Unlike banks, insurance markets have operated normally. Banking operated anything but normally, and it's not operating normally today. Insurers have skin in the game, and the banks do not."

?o Scaling back of the Terrorism Risk Insurance Act (TRIA). "The Administration is looking to scale back its support for TRIA. The larger an insurer is in terms of commercial exposure, the more you're going to be worried about this, particularly if you have a lot of exposure in major urban areas. It's one of those areas that would increase the net cost of a claim in the event of a terrorist attack for an insurance organization."

o Legal liability and tort environment. "This is one area that will lead directly to higher claim severities. Tort costs in the U.S. are once again on the rise. During the financial crisis, trial lawyers were plotting and scheming to undermine and erode the tort reforms of the previous decade. While no one was paying attention, they have been very successful in terms of finding ways to ratchet up costs."

o The $100 billion catastrophe year. "What most people talk about is that there were no hurricanes in 2009, but last year was the second-most expensive year for thunderstorm-related losses, like hail. There is a steady upward trend in the number of billion dollar events. I think we'll end up with higher catastrophe losses in the decade ahead, quite possibly a $100 billion catastrophe loss year."

Eric Gilkey is Editor-in-chief of Claims Magazine.