As 2003 comes to a close, it's a great opportunity for executives to gauge the current business climate and identify trends that will follow through to the new year. For insurance carriers, the near-term outlook is considerably more upbeat than it was 12 months ago.That was the crux of the message delivered by Frank Coyne, ISO chairman, president and CEO, to attendees at the recent ISOTech conference. Coyne's keynote highlighted significant indicators of the firming insurance market: Premiums rose 11% in the first half of 2003; the industry's annualized return on net worth rose a robust 9.7% during the first six months of the year, a significant improvement over the 1.8% gain in 2001; and, the industry's combined ratio is projected to improve to 101, nearly 15 points higher than 2001's level of 115.9.

I'd also add the strengthening equities market to the list of positive signs that the industry is rebounding from the depths of its recent business slump. The miniscule return on insurers' portfolios curtailed carriers' capital investments, including technology spending. There are signs-including industry research and what insurance executives are telling us-that IT spending will return to its traditional 5%-8% growth rate over the next three to five years.

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