Insurance rate hikes are set to continue for the next two years. That's according to Ernst & Young.
In its Financial Services 2003 Outlook, Ernst & Young claimed commercial rates rose by 20% this year "with no signs of going down."
The company said the industry's overall surplus has dropped since 1999, and further rate increases are needed to push this level back up.
Peter Porrino, director of insurance services for Ernst & Young said: "Insurers will need to raise prices until combined ratios drop significantly below the current average level of about 105%.
He added that: "You're not making money at those levels. You need a 90% combined ratio. And I don't think this industry has had a 90% combined ratio for more than a year at a time."
