The property-casualty insurance industry‘s widely-publicized loss reserve shortfall problem is for the most part concentrated in about a dozen large insurers, and is not an industry-wide problem, according to a research report by a financial analysis firm.
Columbus, Ohio-based Demotech Inc. in a study of 2,569 property-casualty insurers found that the industry‘s net loss reserve increase (the difference between reserve increases and decreases on year-end 2002 estimates) was $2.5 billion for the first six months of 2003.
However, the insurers with the 12 largest reserve increases—all large national carriers—raised reserves by $3.7 billion, indicating that the remaining carriers lowered reserves by about $1.2 billion.
