According to Steven Weisbart, senior vice president with I.I.I., the U.S. economy is expected to grow at a little over a 2 percent annual rate, net of inflation.

“The industry is well capitalized to provide additional coverage and to pay claims under it without difficulty,” Weisbart says in statement. “Rates will be determined, as they should be, by state and local-level market conditions, recognizing the impact of inflation on claims and the effect of lower investment income than the industry has earned in prior years.”

More than two-thirds of P&C leaders expect higher premium growth in 2012. Just 2 percent believe premium growth will be negative this year.

Though 78 percent of those surveyed say the industry’s combined ratio will be lower in 2012 (it was 108.2 after nine months in 2011), not many think consolidation among insurers and reinsurers will be a factor in the reduction. More than 70 percent say they do not expect an increase in consolidation.

Natural catastrophes obviously played a large role in knocking down insurers’ profits in 2011, but low interest rates and dim investment gains also contributed.

Just 19 percent say interest rates will rise in 2012, while 78 percent say interest rates will stay flat. Turning to the equity markets, 75 percent expect an up year.

McRaith Talks FIO

Also in the survey, two-thirds of industry executives say it’s too early to tell whether the Federal Insurance Office (FIO) is off to a good start.

The responses came as FIO Director Michael McRaith spoke at the forum, saying he’s aware of the anxiety that his office will be asking for duplicate data, bogging the insurance industry down in paperwork for what has been perceived as, potentially, an additional regulatory authority.

Before some of the industry’s most powerful chief executives and trade associations, McRaith reiterated that FIO “is not a regulatory authority” and that concerns that the office will ask for duplicate data “are not well-founded.”

FIO is required to seek information from a public source first, he said.

True, FIO has subpoena power, and McRaith said its ability to do so is “an important component of our authority,” but the office will only seek to exercise its power “as a last resort to obtain critical information” after a company refuses to offer the information.

The speech was clearly meant to update the audience on the progress made by FIO as it works to lay its foundation as a “monitor” of the insurance sector while also acting as a single point of contact for the industry at the federal level.

He said circumstances will likely dictate FIO’s focus and the definition of “monitor,” but that doesn’t mean FIO “will sit idly by while the world spins.”

McRaith added the agency “is poised to be flexible enough to not only be responsive to current events affecting the insurance industry but also to take the lead in facilitating dialogue and direction regarding the insurance sector both nationally and internationally.”

McRaith, who was director of the Illinois Department of Insurance before his appointment to lead FIO, said he has a “great respect for state regulators” and remembered a time only a short while ago when he was working to reform the Workers’ Comp system in Illinois.

Additionally, McRaith said, the Department of Treasury “understands, appreciates and respects” the insurance industry.

McRaith acknowledged the anticipation surrounding the release of FIO’s report on insurance modernization. He said the report will be released late this month, and while it will be a “broad undertaking,” it will only be a “small slice of our total responsibility,” as it cannot “address every issue that warrants improvement or modernization.”