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.
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