After vastly improving their efficiency in the last five years, bond insurers will be hard pressed to keep future expenses down, according to a report issued this week by Fitch Investors Service.

Net operating expenses for the industry dropped to 22% of premiums written in 1993 from 41% in 1989, according to the report, "Bond Insurers' Operating Efficiency," as the combination of stable costs and skyrocketing volume enabled bond insurers to drastically reduce expense ratios.

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