Commercial property writers in Canada posted better underwriting results for the second consecutive year last year, according to a study by A.M. Best Co.

But the Oldwick, N.J.-based rating agency says it expects pricing to become more competitive this year, with premium growth averaging 5% to 6% for commercial property.

In 2003, the commercial property line’s net loss ratio decreased about 12.3 points to 49.5 from 61.8 in 2002 as hard-market pricing on the direct and reinsurance sides improved and the number of incurred claims leveled off.

“Commercial property generated about 15.8% of the Canadian property/casualty industry’s direct premiums in 2003,” A.M. Best says. “Direct premiums written on this line increased 10.4% in 2003 after rising about 30% in 2002. But commercial property writers’ net premiums written increased nearly 21% in 2003, as many companies increased retentions and restructured their reinsurance in the face of rising costs.”

Canada’s 25 largest commercial property writers saw that line’s direct premiums written increase 10.8% and the net loss ratio decrease by 10 points on average in 2003. Commercial property premiums increased by 20% or more for nearly half of these companies.