P/C insurers' profits up 44% in 2006

JERSEY CITY, N.J.—Helped by low catastrophe losses, the U.S. property/casualty industry posted $63.7 billion in net income in 2006, up 44.3% compared with 2005, according to Jersey City, N.J.-based ISO and the Des Plaines, Ill.-based Property Casualty Insurers Assn. of America.

The industry's combined ratio also improved to 92.4% in 2006 from 100.9% in 2005, ISO and the PCI reported.

The figures are consolidated estimates for all property/casualty insurers based on reports accounting for at least 96% of all business written by private U.S. property/casualty insurers.

Property/casualty insurers reported a 4.3% increase in net written premiums, to $443.78 billion. Policyholder surplus increased 14.4%, to $487.12 billion.

Results were boosted by a drop in direct insured losses from catastrophes, to $9.2 billion in 2006 from $61.9 billion in 2005.

"Insurers and residents of coastal states dodged a bullet last year," Michael R. Murray, ISO assistant vp for financial analysis, said in a statement.

"Though the experts were predicting a highly active hurricane season, no hurricanes struck the U.S., giving insurers and the areas hit by the six catastrophic hurricanes that struck in 2005 much time to recover," said Mr. Murray.