A new report by Deutsche Bank Alex. Brown says that 2002 will be the first year in a new era for the property and casualty insurance business.

In a report provided by Multex.com, DBAB analysts say that 2001 was undoubtedly the worst year ever in the history of the P&C insurance business, from both a human and a financial point of view.

DBAB expects the industry to suffer its largest ever losses and lowest return on equity performance. “When we look back a few years from now, we will easily see how 2001 was a defining year.”

It notes that 2001 had a convergence of three major catalysts for the industry — a major disaster, weak world equity markets and a capacity shortage. It says that coming through 2001, the new year marks the start of a new era for the P&C business. “The future is going to be much brighter for the P&C industry profitability as price increases will be significant and margins should improve.”

DBAB says that it would like to see the P&C insurers account for all the bad news in the year ended December 31, so that they have a clean slate heading into the new era. If firms do this, it says fourth quarter results will look worse than expected.

Its top picks remain Renaissance Re, Hartford Financial Services and Marsh & McClennan.
http://www.multexusa.com