Reserve deficiency in US commercial lines means the market will continue hardening, according to an Aon Benfield study.

The sector’s reserves fell to a deficiency of $US900 million ($944.43 million) at the end of last year, compared with a $US4.1 billion ($4.3 billion) redundancy in 2011, the report shows.

Reserve deficiency increased in commercial liability, workers’ compensation and financial guaranty lines; only property lines saw an increase in reserve redundancy.

The overall property and casualty industry’s redundancy position fell to $US9.2 billion ($9.65 billion) from $US11.7 billion ($12.23 billion) in 2011.

But personal lines redundancy grew to $US10.1 billion ($10.6 billion) from $US7.6 billion ($7.98 billion).

“Rates in the commercial lines sector… have been rising for the past eight to nine quarters, and the lack of reserve cushion should continue to fuel a hardening market,” Aon Benfield Americas Chief Actuary Brian Alvers said.