Property/Casualty Insurance Industry Earnings DROP 70.5%

Business Insurance
Mark Hoffman
12/27/2011

U.S. property/casualty insurers' aftertax net income dropped 70.5% to $7.98 billion during the first nine months of this year compared with a year earlier, according to a survey released Monday by the Insurance Services Office Inc. and the Property Casualty Insurers Assn. of America. Inc.

The survey found that P/C insurers' net underwriting losses grew to $34.91 billion during the first nine months of 2011 from $6.30 billion during the same period of 2010.

The industry's combined ratio deteriorated to 109.9% from 101.2% a year earlier.

Catastrophe Losses Triple

“The deterioration in underwriting results is largely attributable to a spike in net losses and loss adjustment expenses—LLAE—from catastrophes,” the ISO and PCI said in a statement. “ISO estimates that insurers’ net LLAE from catastrophes rose to $33.2 billion” in the first nine months 2011 from $10.8 billion in the first nine months 2010. “These amounts exclude LLAE that emerged after insurers closed their books for each period, but do include late-emerging LLAE from events in prior periods.”

The survey found that net investment gains partially offset the underwriting results, with investments rising 5.4% to $41.97 billion during the first nine months of this year.

Policyholders’ surplus dropped 1.6% to $538.63 billion as of Sept. 30 vs. $547.19 billion at the end of 2010.
 
Net written premiums grew 3.1% to $334.53 billion during the first nine months of the year.
Property/casualty insurers’ third-quarter net income fell 68.7% to $3.22 billion, according to the survey. Net written premiums rose 4.1% to $115.74 billion.

Markel Announces Agreement to Acquire THOMCO

Markel Press Release
12/7/2011

Markel Corporation and Thompson Insurance Enterprises (dba THOMCO) announced today that they have entered into a definitive agreeement for Markel to acquire THOMCO. THOMCO will continue to operate as a separate business unit. The operating unit will be part of Markel Specialty.

THOMCO expects to underwrite in excess of $170,000,000 in gross written premium in 2011. Completion of the transaction is subject to customary closing conditions and is expected to occur in the first quarter of 2012.

ISO Reports U.S. Insurers' Net Income Down 71%

No, the sky is not falling on the soft market

conditions however...objects in the mirror are

closer than they appear...

On September 30th, A.M Best reported that 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. They also reported that the industry’s combined ratio deteriorated more than 9 percentage points to 109.6%, according to the report. Now it is ISO's turn...


Property Casualty 360
By Mark Ruquet
October 10, 2011

The first-half results for property and casualty insurers are in and the results are not very pretty, as the industry reported more than a 71 percent drop in net income.

In a report issued by the Jersey City, N.J.-based Insurance Services Office (ISO), the Des Plaines, Ill.-based Property Casualty Insurers Association of America (PCI) and the New York-based Insurance Information Institute (I.I.I.), private U.S. P&C insurers’ net income fell to $4.8 billion for the first half of 2011 compared to $16.8 billion for the same period a year ago.

Driving the decline were net losses on underwriting, growing $19 billion to more than $24 billion for the first half of the year.

The total combined ratio for the carriers deteriorated 8.8 points to 110.5 for the first half of the year.Complete Article

Property/Casualty Insurance Companies' Net Income Tanks 67% in First half of 2011

Business Insurance
By Mark Hoffman
September 30, 2011

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.

ShieldsTransit

109.6% combined ratio does not lend itself for a continuation of "soft market pricing." 87% of the chief financial officers said they believed the casualty market was still soft or at the bottom of the cycle in June, 80% of them said it was within two years of hardening, according to a statement.

Next Up...Preparing for a Hardening Market Cycle