Fitch Ratings has published its 6-monthly review on the Australian general insurance industry.
Fitch says the industry is currently characterised by "massive rates increases, a reduction in reinsurance market capacity, poor but improving combined ratios and underwriting results, subdued investment market performance, increased regulator scrutiny, low public confidence and investor nervousness".
However, it says that while the focus on the Australian industry has been largely negative, the market is "adequately placed to take advantage of premium rate increases across all portfolios which, with disciplined underwriting and no major domestic catastrophes, should result in lower combined ratios and improved shareholder returns".
Fitch has predicted that Australia's hard market will outlast that in the US and Europe, possibly until 2004.
