The U.S. property/casualty industry’s underwriting income improved 21.0 percent to $8.3 billion in first quarter 2006 from $6.8 billion in first quarter 2005, according to a new special report by A.M. Best Co. Accordingly, the industry’s combined ratio, a key measure of underwriting profitability, improved to 91.2 percent from 92.3 percent reported in first quarter 2005.
The improved underwriting results were a result of prudent underwriting practices and sound risk management as well as a decreased amount of catastrophe losses reported in first quarter 2006.
Demonstrating the fundamental strength of the U.S. property/casualty industry, first quarter operating results rebounded rather nicely from 2005 year-end results.
While A.M. Best recognizes first quarter 2006 as a strong one for the industry, this period is usually quiet with regards to loss-reserve development and the impact of catastrophe losses. With the anticipation of another active hurricane season in 2006 along with stiffer competition, continued downward pricing pressures and slowing economic growth, A.M. Best believes it will be difficult for the U.S. property/casualty industry to maintain the strong first quarter underwriting results for the remainder of the year.
Source: A.M. Best Co.
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