Insurers are more pessimistic than ever about business conditions, notes a new report issued by audit, tax and advisory firm KPMG LLP. KPMG’s annual survey of insurance executives revealed that insurers remain guarded about their company’s performance and the industry’s ability to generate underwriting profit.

The survey of 350 insurance executives--representing an even mix of respondents from property and casualty (personal and commercial lines) and life, along with approximately 5 percent from health--was conducted at KPMG's 23rd Annual Insurance Industry Conference, where more than a third (36 percent) of those queried said business conditions have worsened compared to a year ago. This finding reflects a significant turnaround in executive perception compared to last year's survey, when more than half (51 percent) said conditions had improved from 2009 to 2010. Further, respondents are not expecting improvements in the next 18 to 24 months, with 28 percent of respondents predicting another downturn/double dip before the economy begins to significantly recover. A full 58 percent of those queried believe the recovery will not occur until 2013 or later, says KPMG. Against these dire economic views, only 31 percent of insurance execs surveyed expect their company to perform above expectations next year – a decline of 10 percent compared with 2010 KPMG survey results.

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