The Top 250.

Net premiums written for the leading property/casualty writers grew 2.2% in 1999.

Net premiums for the top 250 property/casualty insurers rose a meager 2.2% to $274.6 billion last year, but growth would have been slower if not for improvements in commercial-lines pricing late in the year.

"There was some growth in the second half as some commercial lines saw improvements in rates. We're continuing to see that in 2000," said Matthew C. Mosher, assistant vice president and actuary in the property/casualty division of A.M. Best Co. Commercial insurers' underwriting discipline in the face of price competition in the first half of 1999 left them with flat premiums or declines, he said.

A look at most of the commercial-lines writers among the top 30 property/casualty insurers tells the story. American International Group, liberty Mutual Insurance Cos., Chubb Group of Insurance Cos., Fairfax Financial (US) Group and Great American P&C Insurance Group showed flat growth or declines, but the results were better than in 1998, when they began walking away from unprofitable business. Larger declines by CNA Insurance Co. and St. Paul Cos. reflected sales of their personal-lines businesses to Allstate Insurance Group and MetLife Auto & Home Group, respectively.

While the first price firming in more than a decade may improve the top line in the commercial segment this year, "from a bottom line standpoint we expect weaker reported underwriting results as prior-year reserves develop unfavorably and claim severity worsens from increasing medical inflation," said Eric Simpson, who heads the property/casualty rating division of A.M. Best Co. "For 2001, the key question is whether the firming will be sustained."

Overall, last year's 2.1% total industry growth was an improvement from a 1.6% increase in net premiums in 1998.

In personal lines, private-passenger auto insurance, which represents about 40% of total property/casualty premiums, may be the wild card for 2000. The two fastest-growing writers in the top 20--No. 11 Progressive Insurance Group and No. 6 Berkshire Hathaway Group, which owns Geico Corp.--have announced rate increases, raising hopes that prices and profitability in the personal-lines business would creep up again. But when State Farm Group, the leading U.S. property/casualty insurer, recently requested rate reductions in California, all bets were off. State Farm is the U.S. market leader with 18.9% of the private-passenger auto insurance market.

While the insured value of cars and the number of insured cars per household are increasing, top-line growth will be constrained by flat or lower rates following State Farm's move, Simpson said.

In the medical-malpractice arena, The Doctors Company Group, Napa, Calif., recorded a 32.6% drop in net premiums following a 38% increase in 1998. Jack Meyer, head of business development, attributed the 1998 boost to a change in the way the company recorded premiums. Among the reasons for the drop in 1999 were an inter-company reinsurance agreement, a new 90% quota-share agreement and a general drop in business, including the loss of a large account at the end of 1998.