U.S. P&C industry sees 59.3% drop in net income in first half of 2009

The net income of U.S. private property and casualty insurers fell 59.3% in the first half of 2009, according to the Insurance Services Office (ISO) and the Property Casualty Insurers Association of America (PCI).
Net income fell from US$14.1 billion in the first half of 2008 to US$5.8 billion in the first half of 2009, a release said.
Insurers’ overall profitability, as measured by their annualized rate of return on average policyholders’ surplus, fell from 5.5% in the first half of 2008 to 2.5% in the same period of 2009.
“Driving the declines in insurers’ net income and rate of return, their net investment gains — the sum of net investment income and realized capital gains (or losses) on investments — fell 50.2% to US$12.4 billion in first-half 2009 from $24.9 billion in first-half 2008,” ISO and PCI said.
Net losses on underwriting fell US$3.4 billion — from US$5.6 billion in the first half of 2008 to US$2.2 billion in the first half of 2009, partially offsetting the deterioration in insurers’ investment results, ISO and PCI noted.
The combined ratio improved to 100.9% in the first half of this year from 102% in the first half of 2008.