I just came across a survey from the Council of Insurance Agents and Brokers that gives confirming evidence that the soft market in insurance may be over.
The survey concludes that "Commercial property/casualty market premiums showed definite signs of leveling off in the fourth quarter of 2008 across small, medium and large accounts and for most major lines of commercial business."
Rates still declined in the fourth quarter of 2008, but at a slower rate than the last few quarters, according to the survey.
“We see evidence in the fourth quarter that premium rates eased as insurers tried to hold the line on pricing. It’s still a competitive market, but we think this may signal the bottom of the soft market, following six years of steady decline. We will see if this trend continues in the first quarter of 2009 as price increases in the reinsurance market begin to trickle down and as the full impact of the economy and market conditions comes home to roost on insurers’ bottom line,” Council President Ken A. Crerar said.
Most insurers are trading below book value due to investor concern about the investments they hold, so is it possible that a return of the hard market along with decade low valuations might be a buying opportunity for investors?
The survey is here.
Thursday, January 29, 2009
Is It Time To Buy The Insurance Sector?
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Agreed a few insurance cos offer a very attractive entry. a few that are trading way below book value and hold relatively solid investments in corps and munis are anat , nwli , cna (a few weaker type of holding but backstopped by Loews) mrh migp....there are a few others but these seem absolutely wipedout at these levels.
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