A combination of fiscal conservatism and hunger for profits as companies compete for market share in personal auto insurance is keeping rate increases to reasonable levels, a Conning & Co. study found.

"There will be rate increases, but they will be not as aggressive as those taken otherwise," Claude A. Fongemie, a vice president at the Hartford, Conn.-based research firm, said Friday.While results will begin to deteriorate in this line of business, the study says, the personal auto industry will return to shorter, more muted cycles, such as those seen before the 1970s, when trends were driven by real market forces rather than high inflation and interest rates.

The study, released Friday, is based on information gleaned from 57 companies that span the spectrum of insurance companies based on size, location and percentage of autos insured.

"Competition is beginning to intensify, and it is starting to compress rates a bit," said Mr. Fongemie, as some companies move into this line of business and others leave less-profitable areas and devote more capacity to auto insurance. "Big companies like Aetna that withdrew from the market are now taking another look, but going into selected markets."

Most telling, Mr. Fongemie said, is that while insurance executives surveyed believe the overall auto market will grow very slowly over the next couple of years, "they will be faster. The industry's loss ratios will worsen, but their own (company's ratio) is getting better. That's a sure sign the cycle is turning. If they are more optimistic about their own loss ratios, they will be not as aggressive on increasing prices."

At the same time, the survey found that the fiscal conservatism of the 1990s, along with such developments as regulatory reform, safer cars, growing markets for nonstandard auto coverage and better claim settlement practices, are leading to improved loss ratios.

"This is very normal part of the personal auto-insurance cycle," Mr. Fongemie said. "This is all good for the consumer and, to the extent the cycle does go back to being more regular, it is also good news for insurers."

The study also found that the growing use of managed health care has reduced the use of medical services and helped keep down the rising medical portion of auto insurance. In addition, it said, auto-insurance reforms in a few states have had a "positive influence on claim frequency and severity."