Insurance News

Many P/C execs pessimistic about 2009

Posted on: January 16, 2009

Property/casualty industry executives don’t think the financial crisis is near its end, according to survey conducted by the Insurance Information Institute during the 12th annual Property/Casualty Insurance Joint Industry Forum in New York.

According to the survey, which was released Wednesday, 66% of the nearly 100 surveyed executives believe the economic woes will continue.

That pessimism extended to the executives’ outlook on their own industry’s performance in the coming year. In fact, 74% of respondents said they don’t expect an improvement in workers compensation, and 62% of respondents do not expect an improvement in commercial lines.

Half of the respondents said premium growth would remain flat, while about one-third said premiums will decline. Only 17% predicted growth in premiums.

In addition, 59% of respondents expect the industry’s combined ratio to be worse this year than in 2008.

“Looking forward to 2009, owing partly to the weak economy, the year is likely to see a soft market, which has persisted for some years,” Steven N. Weisbart, senior vp at the New York-based III, said in a statement announcing the poll results.

“Low interest rates and a weak investment climate are unlikely to provide a significant source of profits for the industry,” he said.

The executives also don’t expect much from Congress. Ninety-three percent said they don’t think Congress will approve natural catastrophe legislation this year, and slightly more than half—51%—do not believe the drive for an optional federal charter for insurers and producers will gain steam next year.

The full survey is available at http://www.iii.org/media/met/09jif.

Copyright © 2009 Crain Communications, Inc.

%d bloggers like this: