US property and casualty industry reports 67% drop in 2011 H1 net income

The U.S. property and casualty industry saw its net income drop 67% in the first half of 2011, to $6.9 billion, battered by unprecedented catastrophe-related losses, reports A.M. Best.
In its report, US P/C First-Half Net Income Plunges on Cat Losses, A.M. Best notes the industry’s combined ratio deteriorated more than nine points, to nearly 110%, through 2011 H1.
Catastrophe-related losses climbed to an estimated $27 billion, more than doubling the total reported for the 2010 H1 and already surpassing the year-end 2010 total.
The industry’s after-tax return on equity plunged to 1.2% from 4.0% for the same period of 2010.
“The industry’s performance measures are likely to remain under pressure for the remainder of 2011 because of a number of factors,” the report said.
These include: “continued expectations for weak underwriting results due to elevated catastrophe-related losses through the third quarter; sustained challenging market conditions in the commercial lines segment; a sluggish economic recovery; relatively low investment yields; and volatility in the investment markets.”