Liberty Mutual Group’s $6.2 billion agreement to acquire Safeco Corp could be a sign of more deals to come in the insurance sector.

“Although property/casualty insurers had their second strong year in 2007 in terms of underwriting results, achieving top-line growth has been elusive. We expect to see more acquisitions by growth-hungry insurers in 2008,” said Matthew Josefowicz, director of the insurance practice at research and advisory firm Novarica.

Liberty Mutual, the sixth-largest property and casualty insurer in the United States, will be adding Safeco’s product lines of providing insurance for individuals and for small- and mid-sized businesses.

Property and casualty insurers in North America are likely to grow more acquisitive this year as the slowing economy makes other forms of growth more difficult, analysts said. Safeco, for example, has been facing increasing competition from rival car insurers such as Progressive Corp, which had been dropping prices to gain market share.

Cliff Gallant, an analyst at Keefe, Bruyette & Woods, said he sees other small regional insurers as targets for bigger companies.

Still, any acquisitions — and especially those with 51-percent premiums — may come with some risks.

Fitch Ratings said “industry-wide softening premium rates will likely place additional strain on (Liberty Mutual Group) to successfully integrate its recent acquisitions while retaining recent run-rate profitability.”

Fitch placed Liberty Mutual on “ratings watch negative” following the Safeco announcement. So, stay tuned.