The U.S. property/casualty industry posted a net underwriting loss of $23.5 billion for year-end 2017, A.M. Best said Monday, mainly due to an estimated $52.9 billion in catastrophe-related insured losses, more than double those seen in the previous year.

The Oldwick, New Jersey-based insurance rating agency said that the preliminary results appear in A.M. Best’s Special Report: First Look – 2017 Property/Casualty Results and represent 96% of the total property/casualty industry’s net premiums written and 94% of policyholder surplus.

Net income for the industry was relatively flat at $40.8 billion, down 1.7% from the prior year.

Despite this slight decline, A.M. Best said industry surplus grew 6.8% to $733.8 billion in 2017, driven by a $39.4 billion increase in unrealized capital gains, which was offset by a $17.5 billion decrease in other surplus gains and a $4.4 billion increase in stockholder dividends.

The results were derived from companies’ 2017 annual statutory statements received as of March 9.

The report said 2017 catastrophes were the main driver for the industry’s additional $18 billion in underwriting losses compared with the previous year.

“A hurricane of Category 3 or worse had not made U.S. landfall since 2005,” the report said. “In 2017, however, three hurricanes — Harvey, Irma and Maria — hit the U.S. as Category 4 in close succession, followed by Hurricane Nate, which made landfall as a Category 1 shortly thereafter. Thus, 2017 marked the first year since 2005 that four hurricanes made U.S. landfall in one season.”

A.M. Best’s report said the $52.9 billion estimate of 2017 property/casualty industry catastrophe losses is a 109.8% increase over 2016, beating out A.M. Best’s previous industry record for estimated insured losses of $41.9 billion recorded in 2011.

The 2011 figure included losses stemming from the Tohoku earthquake and subsequent tsunami in Japan, an active tornado season in the United States and flooding in Thailand.

A.M. Best also estimated that the catastrophe losses account for 10 points on the property/casualty industry’s combined ratio, up from an estimated 4.9 catastrophe points in the prior year. The industry’s reported combined ratio deteriorated 3 points to 103.8 from the prior year and was the worst of the last five years. 

Despite the slight decline in net income, A.M. Best said industry surplus grew 6.8% to $733.8 billion in 2017, driven by a $39.4 billion increase in unrealized capital gains, which was offset by a $17.5 billion decrease in other surplus gains and a $4.4 billion increase in stockholder dividends.