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Property/casualty insurers report higher profits

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U.S. property/casualty insurers' profits leapt to $28.3 billion in 2009 from $3 billion in 2008 as investment income soared and claims costs declined, according to a report released Thursday.

“But insurers' recovery from the recession and financial crisis remained incomplete, with their $28.3 billion in net income for 2009 being less than half of their $62.5 billion in net income for 2007,” said according to the report released by Insurance Services Office Inc. and the Property Casualty Insurers Assn. of America.

Net losses on underwriting fell to $3.1 billion in 2009 from $21.2 billion in 2008, as claim costs plummeted. The industry's combined ratio improved to 101% in 2009 from 105% in 2008, according to the report.

Net investment gains rose 23.2% to $39 billion in 2009. Policyholder surplus rose 11.8% to $511.5 billion at year-end 2009 compared with $457.3 billion at year-end 2008. But surplus at year-end 2009 was down 1.2% compared with surplus at year-end 2007.

Despite the increase in profitability, 2009 net written premiums fell to $419 billion, down 3.7% compared with 2008.

“Net written premium growth has been negative for three consecutive years,” according to the report.

The report analyses consolidated estimates for all private property/casualty insurers based on reports accounting for at least 96% of all business written by private U.S. property/casualty insurers, according to ISO and PCI.