Property/casualty insurers' income rises, underwriting results fall: Analysis
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U.S. property/casualty insurers’ aftertax net income increased nearly 21% to $34.7 billion in 2010 from a year earlier, according to an analysis released Wednesday.
In 2009, the U.S. property/casualty industry had $28.7 billion in aftertax net income, according to the Insurance Services Office Inc. and the Property Casualty Insurers Assn. of America.
The data provided by the Jersey City, N.J.-based ISO and Des Plaines, Ill.-based PCI accounts for at least 96% of all business written by private U.S. property/casualty insurers.
2010 results
Net written premiums increased 0.9% to $3.7 billion in 2010. The insurers reported a 102.4% combined ratio for 2010 vs. 101% a year earlier. Policyholder surplus increased 8.9% to $556.9 billion.
Among other results, insurers’ net investment income earned rose to $47.2 billion last year. When net realized capital gains are included, insurers reported a 35.2% increase in net investments, which rose to $52.9 billion in 2010.
Optimism a contributing factor
Commenting on property/casualty insurers’ positive results for 2010, Michael Murray, ISO’s assistant vp of financial analysis, said growing investor expectations that the economy will continue to improve have contributed to the increase in investment gains for insurers.
“But insurers continue to face substantial head winds in their core business—underwriting—with prices yet to firm in many commercial insurance markets despite rising loss and loss adjustment expenses,” Mr. Murray said in a statement.
The report, “Investment Gains Propelled Improvement in P/C Insurers’ Overall Financial Results for 2010 as Underwriting Results Deteriorated,” is available at www.iso.com.
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