P&C industry’s reserve position strengthened in 2017: Conning

The overall property and casualty industry’s loss reserve position appears to be sufficient, after again strengthening in 2017.

This is according to an annual study by investment management firm Conning, ‘2017 Property-Casualty Loss Reserves: Not What We Were Expecting’, which reviews the property-casualty industry's loss reserve position at the end of 2017, by line of business and in total.

"The property-casualty insurance industry's reserve position improved slightly in 2017," said Bill Burns, vice president, insurance research at Conning. "The industry continues to carry sufficient reserves, assuming claims settlement patterns continue at the current pace. However, there is a concern that with more robust growth and inflation, settlement patterns may well change, adversely impacting loss reserve adequacy."

Steve Weberson, head of insurance research at Conning, added: "The industry experienced favourable loss development of $12.5 billion in 2017, based on the preliminary data used for our analysis. This is the twelfth consecutive year that the industry has had favourable development from prior accident years, and 2017's favourable development exceeded our estimate of the reserve redundancy embedded in the year-end 2016 carried reserves. However, despite the favourable position of the industry overall, the auto and other liability lines are deficient, and are a cause for concern."

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