The report said auto pricing continues to rise, and is outpacing liability loss cost trends as insurers seek to protect operating margins and stem the impact of low re-investment rates. Analyst Enrico Leo, said, however, that “we note that rate increases are moderating as severity trends which previously increased have begun to decelerate."

"Direct writers of auto insurance continue to gain market share and possess significant competitive advantages in terms of economies of scale, low expense ratios, and the ability to offer competitive prices to consumers," Leo said. "In addition, in order to generate growth, some agency writers have recently announced intentions to lower expenses and set their rates more competitively,” Leo said.

As for homeowners, insurers continue to institute rate increases, tighten underwriting standards, and implement other risk management initiatives in response to high catastrophe and weather-related losses over the last few years, Moody’s said.

As a result, underwriting margins are improving. “The employment of sophisticated data analytics in front-end underwriting will remain a key driver for insurers seeking to improve profitability in this volatile business line,” the report said.

Moody’s said competition in the personal lines market appears to be increasing as companies shift their focus to growth after taking underwriting actions to improve homeowners profitability.