Homeowners loss-frequency trends continue to increase, and, catastrophes included, KBW says both severity and frequency data experienced “multiple point jumps” in the last two quarters, due mainly from weather-related events.

For personal auto, claim severity increased in the quarter compared to the previous one, while frequency dropped. “The trends of this data portray the recent environment for the industry, with fewer, but larger-scale catastrophe-related events,” says KBW.

For commercial-lines specialty carriers, KBW says it expects rate declines in the low-single-digit range for most casualty lines, but also believes carriers will get rate increases in “select lines of business,” pointing to workers’ compensation as an example. KBW says, “We expect most companies to report that premium rates have flattened but remain down relative to the rates charged” in the 2010 third quarter.

Due to the economy, KBW does not expect a significant increase in insurable exposures in the near term. “With a relatively steady exposure base and modestly negative to flattish overall premium rates for regional agency and specialty carriers, we do not expect to see much organic growth--if any--in gross premiums written in 3Q11,” KBW says, noting that year-over-year comparisons of premium growth may appear favorable due to acquisitions made within the sector.

As with personal lines, weather events are expected to negatively impact carriers in this space, and KBW says insurers with international operations may report additional losses in the 2011 third quarter related to the New Zealand and Japan earthquakes earlier in the year and late last year.

“Non-catastrophe-related claims trends continue to be benign,” KBW says. “We believe claims frequency has bottomed and, as the economy improves, may start to increase, particularly for workers’ compensation risks.” But the firm notes it does not expect significant increases in these claims.

The third quarter is expected to be a difficult one for Bermuda companies, according to KBW, due to several small loss events and additional losses from events earlier in the year and late last year. “Excluding catastrophes,” says KBW, “we expect underlying results [for Bermuda companies and reinsurers] to be characterized by flat to modestly growing top lines, continued slow deterioration in underlying underwriting profitability, moderate reserve releases--although at a declining pace from recent quarters--and continued investment yield pressure.”

For insurance brokers, KBW says it expects a “respectable quarter” driven by mid-single-digit revenue growth. The firm says, “We believe the larger brokers are in a good position in the wake of recent loss events as the firming of cat pricing presents potential upside to growth and earnings estimates."