U.S. reinsurers income down slightly in first-half 2004

U.S. reinsurers saw their net income drop slightly to US$2.56 billion in the first six months of 2004, compared to US$2.59 billion for the same period a year prior, according to results compiled by the Reinsurance Association of America (RAA).
One reason for the drop is a decline in premiums, with gross written premiums down to US$22.21 billion (first-half 2003: US$24.65 billion) and net earned premiums down to US$14.27 billion (first-half 2003: US$15.18 billion).
Another reason may also be the decline in reinsurer numbers while 2003’s results included 30 companies, this year’s figures come from 27 companies.
Insurers did see gains on the expense and underwriting side. The overall combined ratio in the first half of this year was 96.3%, down from 97.9% a year earlier. The result is an underwriting profit of US$336.66 million in the first half of 2004, more than triple the underwriting profit of US$73.70 million produced in the first half of 2003. At the same time, the expense ratio dropped to 25.5% (first-half 2003: 26.6%), and the loss ratio fell to 70.8% (first-half 2003: 71.3%)
This helped offset the decline in investment income, which came in at US$2.31 billion in the first six months of this year, compared to US$2.48 billion a year ago. Net realized capital gains also fell, to US$796.83 million from US$1.67 billion.
At the end of June, 2004, overall policyholder surplus stood at US$55.94 billion, up from US$44.73 billion at the end of June, 2003.