While commercial-insurance rates are on the rise, other factors could pressure fourth-quarter earnings for specialty and Bermuda insurers, according to an analyst's report.
Stifel Nicolaus says the combination of dwindling reserves, loss-cost inflation and Superstorm Sandy losses will put pressure on underwriting margins for specialty insurers and Bermuda underwriters. Low interest rates from fixed-income investments will also put pressure on margins, says the analyst.
Fourth-quarter earnings per share are expected to be negative for most companies the analyst covers, with the exception of RLI, W.R. Berkley and ACE.
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