U.S. property and casualty sector shows deterioration in 2009 Q1

The U.S. property and casualty’s net income plunged approximately 87% to US$1.2 billion in 2009 Q1, reflecting challenging investment and underwriting markets, A.M. Best says in a special report to be released July 13.
The industry’s net premiums written decreased 3.8%  (or US$4.2 billion) to US$107.6 billion in 2009 Q1 from US$111.8 billion during the same period of 2008.
The industry also reported an underwriting loss of US$800 million, “driven by continued rate pressure, lower top-line growth, weather-related losses and the impact of significant losses reported by mortgage and financial guaranty insurers,” the report says.
Overall the combined ratio rose to 100.5% in 2009 Q1, up from 99.8% in 2008 Q1. The mortgage and financial guaranty segments reported an underwriting loss of US$1.9 billion and posted a combined ratio of 220.8%.
The personal lines segment’s underwriting results also deteriorated from a combined ratio of 98.4% in 2008 Q1 to 100.7% this year.
On the other hand, the commercial lines segment’s combined ratio showed modest improvement, decreasing down to 101.2% from 102.1% in 2008 Q1.
Net investment gains for the property and casualty sector fell US$8.7 billion — from US$13.1 billion down to US$4.4 billion.