Is the cyclical hard market taking a turn for the soft?
According to one expert, that is just what appears to be
happening.
"The property and casualty insurance market is
softening. As a result, business owners will have more free capital
for investing. A 10 percent composite reduction in insurance
premiums will have a positive impact on the economy as these premium
reductions could literally put billions of dollars into the pockets
of business owners", said Richard Kerr, chairman and CEO of
MarketScout.
"Based upon submissions and pricing models
developed from MarketScout's database of over 60 A-rated insurance
companies and 48,000 insurance professionals, September's composite
rate increase is 12 percent," continued Kerr. "September reflects
the greatest reduction in the composite rate in three years. Absent
a major cataclysmic event or discovery of drastic under reserving
methods, the market will continue to soften. The September 2003
market data is a clear signal the insurance market is nearing the
end of a four year hard market cycle.
"Our calculations, coupled with the
Insurance Services Office (ISO) statement that the U. S. property
and casualty industry's net income after taxes rose to $14.5 billion
in first half 2003 (as compared to $4.4 billion in first half 2002),
indicate the property and casualty hard market is over."
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Is the cyclical hard market taking a turn for the soft?
According to one expert, that is just what appears to be
happening.
"Our calculations, coupled with the
Insurance Services Office (ISO) statement that the U. S. property
and casualty industry's net income after taxes rose to $14.5 billion
in first half 2003 (as compared to $4.4 billion in first half 2002),
indicate the property and casualty hard market is over."
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