AIG chairman M.R. Greenberg says that property and casualty rates are likely to continue their upward climb in 2003.
Greenberg reported in a conference call with analysts that insurers are rebuilding their capital base, which has been greatly impacted by higher claims costs in some lines, by an estimated $70 billion in catastrophic losses from the Sept. 11 terrorist attacks, and by less than adequate rates in a variety of lines as firms competed for market share in the 1990s.
While P/C rates likely will continue their move upward, Greenberg noted that reinsurance rates are likely to continue to become steady in many classes of business for the next few years.
Reinsurers, which have aggressively decreased their risks by limiting terms and conditions on policies in recent months, also will be less likely to take on a lot of business with less than adequate terms, he added.
Greenberg added that he’s not sure if Congress will pass a federal insurance program for acts of terrorism.
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