2010 H1 catastrophe losses surpassed total catastrophe losses in 2009

Catastrophe losses for the first half of 2010 have already exceeded the $5 billion of catastrophe losses reported for the whole of 2009, reports Fitch.
Fitch evaluated data from 50 U.S. property/casualty insurers and found that underwriting results took a hit in 2010 H1 as a result of $8.3 billion in catastrophe losses. The figure is more than double the $3.7 billion reported during 2009 H1.
Loss ratio for the group rose two points, from 66.1% in 2009 H1 to 68.2% for the same period of 2010.
Combined ratio for the group also deteriorated from 94.1% in 2009 H1 to 97.1% in 2010 H1.
But, the group did see its collective net income more than double, primarily buoyed by improved investment results. Net income surged from $6.6 billion in 2009 H1 to $16.2 billion in 2010 H1.
Fitch also noted that of the 46 companies that disclosed loss reserve development for 2010 H1, all but one released loss reserves during the first half of 2010.
“Reserve redundancies that have enhanced earnings for some time have approached exhaustion for many insurers,” Fitch said in its report.
“A reduced ability to mask weaker current year results with favourable prior period development may be a contributing factor towards a future shift in pricing trends.”