P/C Insurers’ Net Income Fell 26% in Q1

July 15, 2016

  • July 18, 2016 at 9:38 am
    Phil Florida says:
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    The decrease in net income could be a direct affect of housing construction. New home construction as well as new home purchases has not improved much in the last couple years. Auto insurance has flourished due to an increase of car sales as well as an improved car financing market.
    One must consider if the Citizens take-out process is affecting this decrease in net income. Many former Citizens policyholders may be choosing to self-insure their properties due to the unreasonable premiums being offered by the private insurers.

    Although, I do see the p/c industry improving once new home purchases gets back on track.

  • July 18, 2016 at 11:02 am
    Yogi Polar Berra says:
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    Half of the $4.8B decrease in net income over the two quarters was due to investment yield drop, and a quarter of it was due to cat loss differentials, leaving the remaining quarter of the variance to be explained by other things; e.g. volatility of results in a quarterly accounting period.

    Cats will ebb and flow, quarter by quarter, as will reserve releases or strengthening. So, what is most concerning to me is the lower investment yield, which may continue to have some inertia absent a change in political leadership.

    • July 18, 2016 at 1:39 pm
      Phil Florida says:
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      Yes.. You are correct. My response was directed towards the state Florida but your comment is exactly right.. thanks for the explanation.



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