The property/casualty sector reported strong premium growth and vastly improved underwriting results during the first nine months of 2003, said ratings agency AM Best.
It said compounded annual price increases and improving underwriting fundamentals in reinsurance, commercial lines and personal lines were behind the improved results.
Rate increases, rigid policy terms and coverage restrictions applied during the past several renewals resulted in a sharp reduction in underwriting losses to US$5.2bn for the first nine months of 2003, compared with losses of $19bn for the same period in 2002.
AM Best said that barring any major catastrophe or another significant decline in the equity markets during the fourth quarter, the industry would generate favourable operating results and add to surplus for the first time in three years.
On a more negative note, AM Best said that the benefits of the hard market would be diluted in the full year results for 2003 due to asbestos and environmental claims, adverse developments on core loss reserves, especially in the commercial lines segment, and continuing investment challenges.
