Once-stable property/casualty insurance lines produced significant volatility last year, while others that often struggle to produce underwriting returns enjoyed their highest profitability in decades, according to a report released Monday by Guy Carpenter & Co. LLC.

And, according to Guy Carpenter’s 2018 Risk Benchmarks Research Report, “the familiar underwriting cycle has decoupled materially across long-tail casualty lines, with profitability, growth and reserve development moving in widely different directions by line and segment.”

The report found that strong equity-market performance pushed industry surplus to its highest level ever at the end of 2017. But the costliest year of North American catastrophe activity since 2005 drove the gross loss ratio of the study’s median insurer up 12% in just two years.

In fact, “2017 was the first year to eclipse USD 85 billion in trended North American cat activity since hurricanes Katrina, Rita and Wilma in 2005,” said the report.

The report found that 44% of property/casualty underwriters posted a positive underwriting return in 2017, down from an average of 59% percent from 2014 through 2016. The industry experienced a 3.8% underwriting loss in 2017, compared with a loss of 0.4% in 2016 and a profit of 1.6% in 2015.

But the report also noted that favorable trends in workers compensation continue to manifest themselves. It said that 60% to 70% of the workers comp insurers achieved an underwriting profit.

“The accelerating rate of change has been a constant in the (property/casualty) insurance market over the past several years,” Tim Gardner, New York-based CEO of North America at Guy Carpenter, wrote in the introduction to the report. “The recent performance of the (property/casualty) industry seems a departure from the long-term trend, rather than the familiar regression towards it.”

“Profitable growth in the (property/casualty) industry over the next 10 years is likely to be driven by realizing greater efficiency by transitioning away from legacy systems to more nimble platforms and leveraging new technology and data to better price, manage and mitigate risk,” added Mr. Gardner. “With every element of the insurance value chain evolving at a rapid pace, insurer understanding of the fundamental shifts in the market is more vital than ever.”