P/C Insurers Improve Personal Lines, Investment Results in Q3

January 4, 2011

The U.S. property/casualty industry generated improved operating results in the third quarter despite competitive market conditions, elevated catastrophe losses, the economic downturn and historically low investment yields.

The industry’s net income improved to $29.9 billion for the nine months ended Sept. 30, 2010, up from net income of $17.2 billion for the same period of 2009, driven primarily by realized capital gains, according to A.M. Best.

However, despite another quiet U.S. hurricane season, significant favorable prior year loss reserve development and improved results in the personal lines segment, the industry’s underwriting performance deteriorated slightly compared with the same prior year period. The industry’s underwriting loss was offset by a more than 50 percent increase in net investment gains compared with the same period of 2009.

For the nine months ended September 30, 2010:

  • Net premiums written increased 0.6 percent to $327.4 billion.
  • The overall statutory combined ratio was 101.3, compared to 100.8 during the same prior year period.
  • According to A.M. Best Co. data, net catastrophe related losses from severe weather events occurring in the first nine months totaled an estimated $16.1 billion, up from an estimated $12.9 billion from the same period of 2009.
  • Favorable prior year loss reserve development shaved 3.5 percentage points off the calendar year combined ratio, compared with 3.1 percentage points during the same period in 2009.
  • Net investment income fell 1.5 percent to $36.6 billion from $37.2 billion in the first nine months of 2009.
  • The U.S. P/C industry’s policyholders’ surplus increased 11.1 percent to $558.8 billion from $503.1 billion posted through the same period of 2009.

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