P/C Insurance Industry Again Reports Underwriting Loss in Q1

May 25, 2017

The U.S. property/casualty industry posted a first-quarter 2017 net underwriting loss of $841.5 million, according to preliminary financial results, continuing the industry’s underwriting loss trend seen in 2016.

The first-quarter loss was significantly less than the $2.0 billion net underwriting profit reported in first-quarter 2016, and was the only first-quarter underwriting loss reported in the last five years, according to an A.M. Best report.

The data for the report titled, “A.M. Best First Look—1Qtr 2017 U.S. Property/Casualty Financial Results,” is derived from companies’ three-month 2017 interim statutory statements that were received as of May 17, 2017, representing an estimated 96 percent of the total property/casualty industry’s net premiums written.

According to the report, net investment income grew 9.5 percent to $11.9 billion during first quarter 2017; however, nearly half of that was offset by a $5.9 billion loss in other income, reflecting the impact of a retroactive reinsurance contract entered into in February 2017 by American International Group and National Indemnity Co.

Net income fell to $7.3 billion in first-quarter 2017, a 45.2 percent decline in net income from the prior-year period. Despite the significant decline, partly due to the AIG reinsurance contract, industry surplus reached a record $696.9 billion at the end of March 2017, driven by an $8.5 billion increase in unrealized gains, an increase in other surplus gains and a reduction in stockholder dividends.

A.M. Best estimates the property/casualty industry’s three-month 2017 combined ratio deteriorated to 99.7, compared with 97.7 in the same prior-year period. Estimated catastrophe losses of $7.6 billion, up 48 percent from the first-quarter 2016, accounted for 6.0 points on the combined ratio, 1.8 catastrophe points higher than what was seen in first-quarter 2016.

First quarter results vary for individual insurers, of course. AIG, Allstate, CNA, The Hartford and Chubb were among the insurers reporting a better first quarter 2017 than last year, while Liberty Mutual and Travelers saw profits dip in the quarter due to storm losses.

Topics Profit Loss Underwriting Market Property Casualty

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Latest Comments

  • May 30, 2017 at 12:18 pm
    KJP says:
    We'll need a few more quarters like this to even think about a hard market. Doesn't hurricane season start in about a month? The 99.7 combined is still very palatable for th... read more
  • May 26, 2017 at 7:19 am
    Former Status Quo says:
    Last I saw, agents are all pushing for more commission while at the same time rates are declining. There is only so much you can squeeze from the carriers before they push bac... read more
  • May 25, 2017 at 3:06 pm
    Retired UW says:
    There's still too much capacity out there. The greedy CEOs will push for top line dollars unless something like a 9/11 occurs. Admitted markets are playing in the E&S san... read more

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