NU Online News Service, Jan. 14, 12:40 p.m. EST
A majority of industry leaders at the Property/Casualty Insurance Joint Industry Forum said they expect an improvement in personal auto and homeowners insurance profits this year, but many more believe improvements are not coming in workers’ compensation or commercial lines.
Nearly 60 percent of respondents to an Insurance Information Institute survey conducted at the event in New York City on Jan. 11 look forward to improved profits in auto, and 61 percent said the same for homeowners, but 86 percent do not see progress for workers’ comp and 76 percent don’t expect an increase in profits for commercial lines.
The results fall in line with recent comments by industry executives. At the forum, Liam E. McGee, chairman, president and chief executive officer of The Hartford Financial Services, said middle-market commercial insurance pricing “is not rational right now.”
Kristian P. Moor, president and CEO of Chartis, said workers’ compensation is underpriced. He said the company was exiting the market and would continue to do so.
Last November, Liberty Mutual CEO Edmund “Ted” Kelly said the way commercial insurance is written is “patent nonsense” and it is “run irrationally.” He called workers’ comp insurance a “time bomb on the balance sheet of the industry.”
In the I.I.I. survey, slightly more than half of respondents, 53 percent, think premium growth will remain flat and 57 percent of survey participants believe inflation will accelerate in 2011.
Steven Weisbart, senior vice president and chief economist for the I.I.I., said continued low interest rates in 2011 “will challenge insurers to price risks in closer relation to their claims potential.” The rate of bankruptcies may drop, but they will still be apparent in 2011 so “the demand for commercial insurance in 2011 will rise from a smaller base than would otherwise have been the case,” Mr. Weisbart added.
Interestingly, industry leaders were split 50-50 when asked if the new Federal Insurance Office was a positive or negative for the industry.
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.
