U.S. P&C industry sees underwriting losses swell to $30.5 billion: A.M. Best

The U.S. property and casualty industry’s net income plunged to $12.8 billion for the nine months ended Sept. 30, 2011, down from the net income of $33.0 billion for the same period of 2010, according to A.M. Best’s ‘Best’s Special Report.’
Natural catastrophe losses, particularly in the first half of 2011, were cited as the primary strain on insurers’ bottom lines.
The industry reported an underwriting loss of $30.5 billion during the first three quarters, compared to an underwriting loss of $2.6 billion year-over-year.
“As a result, the industry’s statutory combined ratio in the first nine months of 2011 increased 8.5 points to 108.3 from 99.8 during the same period of 2010,” the report says.
The U.S. reinsurance segment had the highest combined ratio during the time frame, at 107.9%. Personal lines segment was second worst, with a combined ratio of 108.4, and the commercial lines segment’s combined ratio sat at 107.9.
“The industry’s investment performance was impacted by the low interest-rate environment, volatility in the equity markets and widening credit spreads through the first three quarters of the year.”
Net investment income saw a small increase at $36.3 billion during the first three quarters of 2011, compared to $35 billion in the same period of 2010.