U.S. property and casualty net income almost triples in 2009: A.M. Best

The U.S. property and casualty insurance industry’s profit in 2009 nearly tripled that of 2008, according to A.M. Best Company’s 12-month 2009 property/casualty results.
The U.S. industry registered a $35.4-billion profit in 2009, up substantially from its $3.8- billion profit in 2008.
This final tally is $4.8 billion more than A.M. Best’s forecasted results in February.
The increase was “driven by improved underwriting results, the continued recovery of the financial markets and disciplined capital management,” BestWire reported.
Combined ratio improved to 100.6%, down from 104.5% in 2008, while after-tax return on equity was 7.2% in 2009, up from 1.9% in 2008.
A quiet hurricane season, reduction in underwriting losses in the mortgage and financial guaranty segments and significant favourable prior-year loss-reserve development benefited underwriting results, A.M. Best reported.
“In 2009, the industry’s top line continued to be pressured by competitive market conditions; excess capacity; deteriorating macroeconomic conditions; leakage of premium to companies domiciled outside the United States; and alternative forms of risk transfer,” according to BestWire.
This resulted in a decrease for the third year in a row of net premiums written — the first time in A.M. Best’s recorded history — to $420.5 billion.
Net catastrophe-related losses were down roughly $13.6 billion — from an estimated $28.2 billion in 2008 to an estimated $14.6 billion in 2009.