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P/C industry net income drops in first quarter

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NEW YORK--The U.S. property/casualty insurance industry's aftertax net income dropped 5.5% to $15.81 billion during the first quarter of 2007 compared with last year's first quarter, according to Jersey City, N.J.-based Insurance Services Office Inc. and the Des Plaines, Ill.-based Property Casualty Insurers Assn. of America.

"The financial performance of the property/casualty insurance industry during the first quarter of 2007 was generally excellent, but at the same time provided confirmation that the industry is now past its cyclical peak in profitability of 14% achieved in 2006," said Robert P. Hartwig, president and chief economist at the New York-based Insurance Information Institute, in a commentary on the report.

"The only question that now remains is how long the decline in profitability will last and how many years it will take to get to the bottom," said Mr. Hartwig.

Among other results, net premiums written increased 0.8%, to $111.42 billion, while the combined ratio increased to 91.7% from 91.1%.