US property/casualty sector results up in first half
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The U.S. property/casualty industry’s results improved for the first half of 2018 thanks to premium growth and lower catastrophe losses, says A.M. Best Co. Inc. in a report issued Thursday.
The industry’s net premiums written grew by 13.3% over the first half of 2017 to $306.7 billion, which offset a 3.8% increase in losses and loss adjustment expenses incurred, a 12.9% rise in underwriting expense and a 10.1% increase in policyholder dividends, said the report issued by Oldwick, New Jersey-based Best, First Look: First Half 2018 Property Casualty Financial Results.
The industry’s combined ratio improved 4.5 points from the prior-year period to 96.4%, which was the lowest six-month period combined ratio of the last five years.
The report also said catastrophe losses have returned to a “more normalized” level during 2018’s first half, accounting for 4.2 points of the six-month 2018 combined ratio, down from an estimated 6.8 points in the prior year.
Best said first-half results also reflected a $3.7 billion increase in net investment income and a $2 billion increase in realized capital gains.
In addition, in the first six months of 2017 there was a $5.9 billion loss reported within other income that was associated with a retroactive reinsurance contract entered into by American International Group Inc. and Berkshire Hathaway Inc. in February 2017, which was not repeated during the current period.
The report said combined with the strong underwriting improvement, these items boosted industry net income to $33.6 billion, which was a 125.4% increase over the prior-year period.
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