Third-Quarter Net Income Improves for P&C Industry
A.M. Best reports industry balance sheet remains strong, will absorb effects of superstorm Sandy.
Insurance Networking News, December 31, 2012
Net income for P&C insurers in the United States more than doubled during the first three quarters of 2012, increasing to $31.2 billion from $12.3 billion for the same period last year, as a result of improved underwriting results, according to “U.S. P/C Net Income Improves in 3rd Qtr; Sandy’s Impact Yet to be Realized,” a special report from an A.M. Best Co.
The impact of superstorm Sandy, which hit the East Coast of the United States in October, has not yet been fully calculated and will negatively affect financial results for Q4 and for 2012. However the industry is well-capitalized, A.M. Best said, and “should result in Sandy having only a modest impact next quarter.” Last week, Fitch released similar findings.
A.M. Best found that the combined ratio for the industry improved to 100.1 from 108.5 for the same nine month period in 2011. Highlights from the report include:
• Underwriting losses for the first three quarters of the year fell to $4.4 billion from more than $30 billion for the same period last year and increased net income, driving a 2.1-percent increase in policyholders’ surplus year to date; net investment income declined 1.3 percent year-over-year.
• Net premiums written year-to-date for the P&C industry increased 4.4 percent. NPW for commercial lines outpaced personal lines for Q3, primarily as a result of increasing direct premiums written in workers’ compensation, commercial multi-peril and ocean and inland marine lines.
• Through the third quarter, catastrophe losses moderated significantly; 5.4 points of the P&C industry’s combined ratio were generated by catastrophe losses compared with 11.9 points in 2011.
• Superstorm Sandy should not present significant capital challenges and the industry’s balance sheet is strong, even after record catastrophe losses last year. A.M. Best said the industry will absorb these losses without significant effects to overall financial strength.
For more information on related topics, visit the following channels:
Add Your Comments...
If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.
You must be registered to post a comment. Click here to register.