NEW YORK—The U.S. property/casualty insurance industry is expected to report a 102.6% combined ratio for 2010 and a 102.2% combined ratio for this year, as the benefit of reserve releases tapers off, said rating agency Standard & Poor’s Corp. in a report issued Thursday.
At a CEO panel last month, Anthony J. Kuczinski, president and CEO of Munich Reinsurance America Inc. in Princeton, N.J., said insurers’ release of prior-year reserves can create a deceptive picture of performance, with calendar-year results that may be very different from underwriting results .
The report by the New York-based rating agency also predicts that rates for most commercial lines generally will remain flat or decrease by up to 5% until the economic recovery gains momentum or a large loss event acts as a catalyst for significant rate increases.
“Absent a large loss event, we believe that a material improvement in pricing will likely not occur until at least mid-2011,” the report says.
The report, “The Data Suggest That U.S. Property/Casualty Market Conditions Should Stay Tough Until at Least 2011,” is available to RatingsDirect subscribers on the Global Credit Portal at www.globalcreditportal.com. Nonsubscribers may purchase a copy of the report for $500 by calling 212-438-7280 or by sending an e-mail to research_request@standardandpoors.com.
U.S. property/casualty insurers reported $11.5 billion in net profit for the first three months of this year, compared with a $900 million loss for the same period a year ago, said Oldwick, N.J.-based A.M. Best Co. in a special report.