Re/insurers Survey: “Worst of Crisis Over”
Bermuda re/insurers along with other leaders of the global property/casualty insurance industry believe the worst of the financial crisis is over according to a survey conducted by the Insurance Information Institute at its 15th annual Property/Casualty Insurance Joint Industry Forum held in New York (Jan.12).
Attended by representatives of the Bermuda re/insurance sector and partly sponsored by the Association of Bermuda Insurers & Reinsurers (ABIR), 94 percent of executives in the property/casualty industry polled at the III gathering expect an improvement in profitability in 2011.
ABIR represent represents the global public policy interests of 23 international insurers and reinsurers with headquarters and operations in Bermuda and with operating subsidiaries in the United States and around the world.
Looking at the industry’s profitability, a majority of industry leaders believe that profits will improve in most property/casualty lines.
Broken down by lines of insurance, 59 percent of respondents believe there will be an improvement in personal auto and 61 percent expect an improvement in homeowners.
However 86 percent of respondents do not expect an improvement in workers compensation and 76 percent of respondents do not expect an improvement in commercial lines.
In the area of torts, 53 percent of respondents believe that tort trends will remain the same in 2011; 37 percent believe it will deteriorate; and only 10 percent believe it will improve.
On the investment side, 88 percent of industry leaders expect an up year in the equity markets in 2011 (but for the industry as a whole, equities constitute only about 18 percent of invested assets). About 70 percent of invested assets are in bonds.
Industry leaders were asked whether comprehensive financial services reform approved by the US Congress and signed into law by President Obama in 2010 will be helpful, harmful or neutral to the P/C industry. Fifty-nine percent believed it would be neutral, 33 percent believed the new law will be harmful and 8 percent believed it would be helpful.
Industry leaders were also asked whether they thought the new Federal Insurance Office would be a positive or a negative for the industry. The responses were tied; 50 percent thought it would be positive and 50 percent thought it would be negative.
The Property/Casualty Insurance Joint Industry Forum was created to provide leaders from the widest spectrum of the industry with an opportunity to meet with each other in discussion of topics of general interest.
Participants included nearly 250 representatives from property and casualty insurance and reinsurance companies and organisations. Of these, roughly 40 percent responded to the survey.
