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Member, Beacon International Group, Ltd.
The U.S. property/casualty insurance industry’s net income fell 67% to $6.9 billion during the first six months of this year compared with the same period a year earlier, according to a report to be released by A.M. Best Co. on Monday.
The industry’s combined ratio deteriorated more than 9 percentage points to 109.6%, according to the report. Oldwick, N.J.-based Best noted that the industry sustained $27 billion in catastrophe losses during the first half of this year, which added 12.8 percentage points to the combined ratio.
Investment income edged up about 4% to $28.7 billion during the first six months of the year compared with the same period last year. Policyholder surplus stayed virtually flat at $556.2 billion during the first six months of this year compared with $554.3 billion at the end of 2010.
Because of a number of factors, “the industry’s performance measures are likely to remain under pressure for the remainder of 2011,” said Best. These include “continued expectations for weak underwriting results due to elevated catastrophe-related losses through the third quarter,” “challenging market conditions” in commercial lines, a sluggish economy and relatively low investment yields, as well as volatility in the investment markets, said Best.