Private U.S. insurers see 2011 Q1 underwriting losses more than double: IIS

Private U.S. property and casualty insurers’ net underwriting losses grew to $4.5 billion in 2011 Q1 from an underwriting loss of $1.8 billion in 2010 Q1, reported the Insurance Information Institute.
The figures are consolidated estimates for all private property/casualty insurers based on reports accounting for at least 96% of all business written by private US property/casualty insurers.
The combined ratio deteriorated to 103.3% in 2011 Q1 from 101.1% in 2010 Q1. The insurers’ net income after taxes dropped to $7.8 billion in 2011 Q1 from $8.9 billion in 2010 Q1.
Insurers’ annualized rate of return decreased to 5.6% from 6.8% quarter-over-quarter.
“With mounting net losses on underwriting driving the decline in insurers’ net income and overall profitability in 2011 Q1, there’s no denying that insurers continued to face substantial headwinds in their core business – underwriting,” said Michael R. Murray, ISO’s assistant vice president for financial analysis.
“While there were some positive developments that bode well, there have also been some negative developments that suggests insurers’ results will get worse.”
PCS data as of June 20, 2011, shows that catastrophes striking the US in 2011 Q2 had already caused $14.7 billion in direct insured losses to property, more than double the $6.4 billion in direct losses from all the catastrophes that occurred in 2010 Q2, an IIS release says.
However, overall surplus rose to a record high and consumers can rest assured that insurers have the financial resources necessary to cover claims even if this year’s hurricane season is as bad as the experts claims, even if this year’s hurricane season is as bad as the experts predict, the release continues.