U.S. private property and casualty insurers saw net income fall $5.1 billion to $37.7 billion in the first nine months of 2014 compared to the same period in 2013, according to a recent report.
The overall profitability for the first three quarters of 2014, measured by their annualized rate of return on average policyholders' surplus, fell from 9.4 per cent to 7.6 per cent in the first three quarters of 2013, according to ISO, a Verisk Analytics business, and the Property Casualty Insurers Association of America (PCI), Monday.
“The decrease in insurers' pretax operating income was largely driven by deterioration in underwriting results,” reported the PCIAA.
Net written premiums rose $14 billion, or 3.9 per cent, to $377 billion for the first three quarters of 2014 from $363 billion in the same period of 2013. Net earned premiums rose $14.3 billion to $362.3 billion.
Catastrophes that struck the United States in the first three quarters of 2014 caused $14.7 billion in direct insured losses (before reinsurance recoveries) for all insurers (including residual market insurers and foreign insurers and reinsurers), according to numbers from the ISO’s Property Claims Services unit, up $2.9 billion compared with the $11.8 billion in the same period of 2013; however, they were $4 billion less than the $18.8 billion average for nine-month direct catastrophe losses during the past decade.
Insurers' pretax operating income fell $8.9 billion to $36.6 billion in 2014 from $45.5 billion in the first nine months of 2013.
According to ISO and PCI, “the combined ratio - a key measure of losses and other underwriting expenses per dollar of premium - deteriorated to 97.7 per cent for nine-months 2014 from 95.8 per cent for nine-months 2013.”
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