Insurers expecting premium growth to come lock step with the broader economic recovery may be disappointed, a new report from Hartford, Conn.-based Conning Research & Consulting finds.

The report, "Property/Casualty Forecast & Analysis By Line of Insurance, Second Quarter 2010," charts the economic future for insurers for 2010-2012 and finds that even a consensus on the larger economy is hard to come by.

“The consensus forecast is that 2010 will have substantive growth in the real gross domestic product,” the report states. “The latest U.S. government data, however, still have mixed results that do not affirm a solid trend toward economic recovery.”

What is less subject to interpretation is the lingering soft market. While both personal and commercial lines are suffering, the pain is particularly acute on the commercial side. “The market shows signs of improvement, but prices are still decreasing in most major commercial lines of business.”

What’s also certain is that any macroeconomic bounce-back will take time to travel to insurers bottom lines. One eventuality that may have a more immediate, but unpredictable impact is a natural catastrophe.

“Catastrophe losses and sometimes the lack of them have substantial roles in driving loss ratios and often market pricing conditions,” notes the report. Natural catastrophe losses in the U.S. through the first quarter of 2010 were at $2.0 billion, which is about the ten-year average loss for the first quarter. Insurance losses from the Deep Horizon explosion and oil spill are still unknown, but appear mostly to be for alien insurers and reinsurers. The general decreases in property catastrophe reinsurance rates through June 2010 indicate a minimal, if any, impact on U.S. windstorm and earthquake catastrophe markets.”

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