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Member, Beacon International Group, Ltd.
U.S. property/casualty insurers' net income rose to $16.2 billion in the first nine months of 2009 from $4.4 billion for the same period last year, Verisk Analytics Inc. said Tuesday, noting insurer profitability for the period was largely due to lower claim costs.
Verisk, parent of Jersey City, N.J.-based Insurance Service Offices Inc., said the driving force behind the increases in insurers' net income and rate of return was net losses on underwriting, which fell to $3.2 billion from $19.8 billion through the first nine months of 2008. Claim costs during that period dropped $26.5 billion, according to ISO and Property Casualty Insurers Assn. of America.
The combined ratio for property/casualty insurers improved to 100.7% for the first nine months of 2009 from 105.5% during the first nine months of 2008.
Meanwhile, net written premiums for the first nine months dropped 4.5% to $321.2 billion compared with the same period a year ago.
“The decline in written premiums reflects economic conditions,” said Michael R. Murray, ISO's assistant vp for financial analysis, in a statement. He added that the United States' gross domestic product fell 2% during the first nine months of the year compared with 2008, which hurt the insurance industry. “And with insurers competing with one another for shares of a shrinking economic pie, market surveys indicate the recession contributed to continued softening in commercial insurance markets.”
Policyholders' surplus for the first nine months increased $33.5 billion to $490.8 billion compared with 2008 year-end results. Also, investment results for the first nine months of 2009 dropped 6.3% to $35.8 billion compared with 2008 nine-month results, while realized capital losses on investments dropped to $9.6 billion from $9.7 billion during the same period a year ago.