View this article online: https://www.insurancejournal.com/news/national/2002/03/26/16764.htm
The nation’s property and casualty insurers lost $738 million during the first nine months of 2001, compared to a $19 billion profit during the same period in 2000, according to research conducted by Weiss Ratings, Inc.
The loss is the industry’s first since Weiss began rating property and casualty insurers in 1993, and is related mostly to two factors. First, the projected damages from the Sept. 11 attacks caused reported claims to rise $23.5 billion to $171.8 billion through the third quarter of 2001, as compared to $148.3 billion during the same period the prior year. Secondly, the stock market slump caused the industry to be hit with a $6.6 billion, or 49 percent, decline in realized capital gains.
According to Martin Weiss, Ph.D., chairman of Weiss Ratings Inc., one cushion for insurers was that more than a decade of profits helped some companies build up the capital necessary to avoid insolvency despite the massive 9/11 claims. Weiss, however, reported that other companies are likely to be more severely impacted by the tragedy, especially those in the business of dealing in workers’ comp insurance.
Workers’ comp could become the industry’s most vulnerable line of business, as claims are projected to reach billions of dollars. Although the long-term effects of such a disaster may not be known for years, workers’ comp insurers suffered a $1.7 billion loss for the first nine months of 2001, compared to a $161 million loss for the same period in 2000.
Among the 2,159 property and casualty insurers reviewed by Weiss using third quarter 2001 data, a mere nine were upgraded, while 84 were downgraded.