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New York-based Standard & Poor’s Corp. (S&P) reported that property/casualty insurers’ expense growth outpaced their premium growth in 2007. Furthermore, the gap is not expected to close this year as net written premium growth remains relatively flat.
Published on November 11, 2008
According to the report, as a result of soft market conditions, net written premiums increased only 1.3% in 2007 while expenses increased 4.4%. S&P had expected the industry’s expense ratio for 2007 to increase to 26.2%, up from 25.6% in 2006. Instead, it increased to 26.4%.
In 2006, net premiums written increased 3.8%, while expense growth increased 8.0%.
The report said that “salaries and commissions make up the bulk of expenses for the U.S. property/casualty industry.”
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