Property/casualty insurers log best first quarter in 30 years
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Lower than normal catastrophe losses contributed to a 31% increase in first quarter property and casualty insurers' profitability to $18.2 billion, the highest net income in 30 years, according to ISO Insurance Programs and Analytics Services and Property Casualty Insurers Association of America's first quarter financial review of the sector issued Thursday.
Robert Gordon, PCI's senior vice president for policy development and research, said the results were partially attributed to mild catastrophic losses.
Underwriting results were also a contributing factor to profitability, with gains for a third quarter in a row. Net written premium growth for first-quarter 2015 remained 3.7%, the same as the year earlier.
Net investment income grew 4.6% to $11.7 billion in the first quarter of 2015, and realized capital gains increased 59% to $4.7 billion, resulting in net investment first-quarter gains of $16.4 billion, the highest net investment gains since ISO began keeping quarterly records in 1986. Net investment income increase was due to growth in average cash and invested assets, the report said.
Policyholders' surplus declined $3.0 billion to $671.7 billion from the end of 2014, mostly due to dividends to stockholders and unrealized capital losses, the report said.
“The industry needs to focus on underwriting, as investment gains may be unpredictable and investment yields will likely remain suppressed for a while,” said Beth Fitzgerald, president of ISO Insurance Programs and Analytic Services. “It's those insurers that stay current on emerging issues and make use of predictive analytics that will be the best prepared to weather potential storms that the markets, social or technological developments, or nature might send their way.”
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