In its recent “Six Months 2012 P&C Industry Review,” ALIRT Insurance Research, based in Windsor, Conn., also notes the unsure direction of the market, stating that opinions seem to be mixed regarding whether the industry will see a hard market, or a tapering off of higher prices given underlying financial conditions in the marketplace.

The ultimate direction, ALIRT says, is in the hands of the companies and brokers. “Company managements cannot control the weather or global investment conditions, but they can control decisions tied to pricing, terms and conditions, and risk selection,” ALIRT says. “There is evidence that companies–despite decent capital positions–are beginning to display this underwriting discipline.”

ALIRT adds that brokers' ability to “sell” higher prices to insureds “may be critical for this incipient hardening market to gather momentum.”

William R. Berkley, chairman and chief executive officer of W.R. Berkley Corp., said at the KBW conference that he believes the industry is only at the beginning of a market-cycle turn, and he added that he expects his company's relative performance in the marketplace to improve as the cycle turns further.

He outlined his company's strategy of growing the most when the market is on its way up, and letting business go when prices start to decline.

When W.R. Berkley released its second-quarter results, Berkley said at the time that he believes rates will continue to see upward pressure as companies begin to realize their weakening loss-reserve positions.

Reports have shown the industry's reserve position overall remains positive, although ALIRT and a recent Moody's Investors Service report on the commercial-insurance industry both reiterated the feeling that reserve margins will continue to thin going forward.

“Moody's reserve analysis as of year-end 2011 suggests that standard commercial-lines insurers, in aggregate, continue to hold overal modestly positive margins of 1-2 percent of carried reserves, but that reserve redundancies have steadily diminished over the past five years,” says Moody's.

ALIRT also notes a slowdown in commercial-lines reserve releases, stating that 95 percent of all 2012 first-half reserve releases for its composite of 50 U.S. insurers came from personal-lines-predominant companies.

For his part, Berkley expressed skepticism at the KBW conference over competitors' reported loss ratios and reserve positions. He said when he looks back at developed loss ratios over the last 25 years, “I see we do 6 to 10 points better than the industry.” With competitors reporting better loss ratios than W.R. Berkley's, Berkley said, “I have one of two things to conclude: either we're stupid…or they are underestimating their losses.”

If competitors are underestimating their losses, Berkley said it's a certainty that accident-year reserves are inadequate.

Other views on the market cycle at the KBW conference were mixed. Frederick Eppinger, president and CEO of the Hanover Insurance Group, said pricing has been “excellent.” He said the company is getting the rates it wants, and is continuing to achieve increases.

Mike McGuire, chief financial officer of Endurance Specialty Holdings, meanwhile, said he is still seeing continued pressure on rates.

Berkley notes that looking at insurance as one business doesn't really make sense. “This isn't one business,” he said. “This is a whole lot of bits and pieces.”

Regardless of where the market is or might be heading, insurers need to see more rate, according to Moody's. The ratings agency, in its Sept. 3 U.S. Commercial P&C Insurance Outlook, notes that pricing trends remain “broadly positive,” but adds, “Pricing improvement will need to continue in order for commercial insurers to further reduce accident-year loss ratios to acceptable return levels, especially with likely reduced benefit in 2013 and beyond from reserve releases on business written in prior years.”