Is the World Becoming a Riskier Place? Economic Overview and New York Insurance Market Outlook for 2012 & Beyond

This PowerPoint report, presented by Robert Hartwig, president of the Insurance Information Institute, before a meeting of the New York Insurance Association, reviews recent political, economic and catastrophe events in the world and their impact on the property/casualty (P/C) insurance industry. The presentation also provides a summary of P/C financial performance, with a focus on New York State. The presentation reports that P/C insurance profit recovery will be set back by high cat losses, low interest rates and diminishing reserve releases. In New York, the auto insurance market continues to suffer from fraud and abuse that have cost drivers in the state nearly $1 billion since 2005. A section shows profitability and growth in New York P/C insurance markets and an analysis by line and nearby state comparisons. Further sections discuss catastrophe loss developments and trends in the U.S. and globally, the four criteria that are necessary for the market to turn (underwriting loss trends, capital/capacity, reinsurance markets and pricing discipline) and other contributing factors to the underwriting cycle, including the investment environment, the tort/casualty environment, inflation and economic environment.