Property/Casualty Insurers Start to See Profit Increases in First-Quarter
June 24, 2010

Private U.S. property/casualty insurers' net income after taxes rose to $8.9 billion in the first quarter of 2010, compared with a figure of -$1.3 billion in the first quarter of 2009, according to a new report from ISO, an organization that compiles information about property/casualty insurance risks, and the Property Casualty Insurers Association of America (PCIA).

Likewise, the groups report that insurers' overall profitability also saw an increase; the group bases "overall profitability" on the companies statutory net worth, and reports an increase in this area of 6.7 percent for the first quarter of 2010, compared with -1.2 percent for the first quarter of 2009.

While profitability is on the rise for insurers, premiums are not, according to PCIA and ISO. Net written premiums dropped by $1.4 billion for property/casualty insurers for the quarter-from $106.5 billion to $105.1 billion, a 1.3 percent decrease for the quarter from last year. Similarly, net earned premiums declined $2.8 billion, or 2.7 percent, to $102.8 billion for first-quarter 2010 from $105.6 billion for first-quarter 2009, according to the report.

The report attributes the positive increases, despite a decrease in premiums, to improvements in underwriting results. Net losses on underwriting fell by $0.8 billion, or 29.6 percent, to $1.8 billion through March 31, 2010, from $2.6 billion through March 31, 2009, as loss and loss adjustment expenses (LLAE) dropped $4.3 billion to $74.5 billion from $78.8 billion.

"This is further proof that home, auto, and business insurers are fiscally sound, that we have been strong and stable throughout the economic downturn of the last two years, and that we are able to pay claims to policyholders during their times of need," says David Sampson, PCIA's president and CEO.

The figures included in the PCIA report represent consolidated estimates for all private property/casualty insurers based on reports accounting for at least 96 percent of all business written by private U.S. property/casualty insurers.

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