III Forecasts 100.3 Combined Ratio
Tuesday, February 3rd, 2004 Auto Liability Property Workers' CompensationEach year before Groundhog Day the Insurance Information Institute invites a panel of Wall Street stock analysts and industry professionals to come out of their holes, look around for their shadow and forecast the outlook for the industry in the coming year. This year the survey reveals that the combined ratio is projected to fall to 100.3 in 2004, down from an estimated 101.4 in 2003 and well below the terrorism impacted 115.7 result in 2001. The survey also found that growth in net written premiums is expected to slow to 7.4 percent in 2004, compared to an estimated 10.4 percent last year. While the end of double-digit premium growth in the current cycle would at first appear to be an ominous sign for the p/c industry, the survey results indicate that a recovery in the investment environment and continuing improving underwriting performance are bright spots for insurers. Indeed return on equity (ROE) in 2004 is likely to soar above double digits for the first time since 1997.
