C&C Study: Reserves Inadequate

According to a Business Wire report, insurers will have to strengthen their loss reserves in order to be able to meet future claims, as stated in a new Conning & Company study. Though property-casualty rates have been growing in the recent past, reserves are not at the necessary levels to cover the rising costs of claims. According to the study, eight of the nine property casualty lines are severely deficient with a total reserve deficiency of $16 billion - money desperately needed to catch up to claims made between 1998-2000. In addition, the recently acknowledged recession and the events of Sept. 11 will further pressure insurers‘ ability to return to profitability. The study claims that individual insurers, however, appear to be slow to take action when having to deal with the need to strengthen their loss reserves.