Underwriting profits modestly improved in 2009: Fitch

Underwriting profits for the US property and casualty insurers were modestly better in 2009, reports FitchRatings.
The modest improvement was due to the combined impact of unusually light catastrophe losses and favourable loss reserves, according to Fitch’s Property/Casualty Insurers’ Year-End 2009 Review.
The group of insurers in the ‘Fitch universe’ reported an overall combined ratio of 94.3% for 2009, compared to 95.5% in 2008.
Only five insurers from the group reported a combined ratio in excess of 100% in 2009.
The report compiles GAAP 2009 results for 52 reinsurers in the FitchRatings’ universe.
The group had a combined earned premium revenue of roughly $260 billion in 2009, a decline of 1.1% over 2008.
The GAAP incurred loss ratio was 65.8%, a drop of 1.8 percentage points, while the expense ratio climbed just over half a point to 28.5%.
This resulted in a net improvement in underwriting profit for the group.
“Operating profits improved substantially for the year, with the large majority of market participants reporting double-digit operating returns on equity capital,” the report said. “While realized investment losses continued to dampen the group’s overall performance, their affect was greatly reduced relative to the prior year. Only three companies reported an annual net loss in 2009 versus 18 companies one year ago.”