2012 Property-Casualty Loss Reserves: Getting Stronger, or Has the Industry Discovered Fracking?



Michael Warner
Conning, Inc.



Conning—Property-Casualty Reserve Position Stable Despite 2012 Reserve Releases

--Industry releases more than $10.5 billion in reserves in 2012

(Hartford, CT) May 20, 2013— In its latest review the property-casualty insurance industry loss reserves, Conning has concluded that the overall reserve position is stable, or perhaps even slightly improved from the previous review.  This is despite another $10.5 billion in releases in 2012.

“The insurance industry appears to have found the ability to extend earnings support from loss reserve releases beyond where we would have expected this part of the reserve cycle to have been tapped out. In that sense, it feels a little like the oil and gas industry’s discovery of “fracking,” said Stephan Christiansen, managing director at Conning. “These releases and continued reserve strength appear to be supported by improved margins from increasing premiums and a reduction in incurred losses, under assumptions that claims settlement patterns will continue apace. Of course, claims patterns can change as the economy changes.”

The Conning study, “2012 Property-Casualty Loss Reserves: Getting Stronger, or has the Industry Discovered Fracking?” analyzes preliminary 2012 filing data from Schedule P as part of Conning’s ongoing annual review of the balance sheet position of both individual lines of business and the property-casualty industry as a whole.

“Reserves appear stronger than a year ago, reversing a trend of declining redundancies since 2009.” said Steven Webersen, Director of Research at Conning. “With stronger premium growth and continued slow claims development patterns, the industry may be able to sustain this level of releases and not have to reverse direction.”

“2012 Property-Casualty Loss Reserves: Getting Stronger, or has the Industry Discovered Fracking?” is available for purchase from Conning by calling (888) 707-1177 or by visiting the company’s web site at www.conningresearch.com.

About Conning

Conning (www.conning.com) is a leading investment management company for the global insurance industry, with almost $86 billion in assets under management as of March 31, 2012 through Conning, Inc., Conning Asset Management Limited, Cathay Conning Asset Management Limited, and Goodwin Capital Advisers. The company's unique combination of asset management, risk and capital management solutions and insurance research helps clients achieve their financial goals through customized business and investment strategies. Founded in 1912, Conning is focused on the future, providing clients with innovative solutions, leveraging its global capabilities, investment experience, and proprietary research. The company is headquartered in Hartford, Connecticut, with additional offices in Purchase, London, Cologne, and Hong Kong.