General Liability Losses and Expenses to Rise

General Liability Losses and Expenses to Rise: "Just how the recession will affect different lines of insurance is a common topic of discussion these days. A new study by Conning Research and Consulting suggests that the general liability line of insurance will see accelerating growth in losses and expenses in the next couple of years due in part to the recession. According to Conning, the general liability insurance line has produced industry-wide combined ratios below 100 percent for the past two years, but this profitable underwriting performance is unlikely to continue. While premium reduction is expected to moderate and even see a modest increase by 2010, Conning says losses and expenses are forecast to grow more quickly, with combined ratios expected to reach 107 percent by 2010. A press release quotes Stephan Christiansen, director of insurance research at Conning: “History has shown us a cyclical increase in general liability losses in periods following recessions. At the same time, longer term secular trends point to an increase in both smaller claims and larger mega risks.” To meet the challenges to profitability Conning suggests insurers will need to monitor trends in costs – particularly losses – and demand. Longer term, the best prospects for general liability insurers may come from an expanding specialist focus."

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