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The U.S. property casualty (PC) insurance industry in 2011 reported its largest underwriting loss since 2006, according to insurance ratings agency A.M. Best.  The industry’s operating performance sharply deteriorated during last year as catastrophe-related losses mounted throughout the year.  Catastrophe events both here and abroad more than doubled the loss amount reported for 2010, A.M. Best said.

Analysts at Conning Research and Consulting say the property casualty insurance industry can expect premium growth of between 3 and 4 percent in 2011, and about 5 percent for the following two years.

Through 2013, premium growth rates for the industry will be “well short of what would be considered a meaningful turn in the underwriting cycle,” says Stephan Christiansen, director of research at Conning.

Despite all the economic and financial challenges of the past year, A.M. Best is maintaining stable outlooks on most areas of insurance for 2011, except commercial lines and health. Those two areas are being downgraded to "negative."

As a group, commercial lines, personal lines, and reinsurance have weathered the past few years fairly well. However, there's potential for downward rating pressure, especially in the commercial segment where loss-reserve adequacy has been eroding, A.M. Best says.