A survey of leading US insurance industry executives has revealed that the majority believe the industry is in the early stages of a hard market.

The survey was conducted by the Insurance Information Institute (III) at its 16th Property/Casualty Insurance Joint Industry Forum in New York.

67% of respondents believe premium growth will be higher in 2012, while 31% expect premiums to remain flat and only 2% believe premiums will fall.

In addition, three-quarters of those surveyed expect an improvement in profitability in 2012 and 72% believe the industry is on the road to recovery.

Most also believe the worst of the global financial crisis is now over, with 75% expecting an improvement in equity markets in 2012, resulting in improved investment results for the insurance industry.

But with the majority of insurer investment portfolios weighted towards bonds, the prolonged low interest rate environment globally will continue to hurt insurer earnings, the forum was told.

“Low interest rates are going to hurt earnings and it is going to push the need for more stringent underwriting,” Matthew Mosher, a senior VP at ratings agency AM Best told the conference.