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please click your print icon! A.M. Best Special Report: P/C Insurers Post Strong Results, First Drop in NPW Since 1943 OLDWICK, N.J., Apr. 17, 2008—A strong fourth quarter capped another solid year for the U.S. property/casualty industry, but year-end 2007 results fell short of the record profits recorded in 2006. The industry’s net income fell almost 7.0% to $66.5 billion from $71.3 billion in 2006. The industry’s after-tax return on equity slipped to 13.0% in 2007 from 15.3% recorded in 2006. The U.S. P/C industry recorded its second consecutive underwriting profit in 2007, posting a $22.1 billion gain, compared with $32.0 billion in 2006. Driven by across-the-board softening in personal and commercial lines pricing, leakage of premium and a growing interest in alternative forms of risk transfer, net premiums written fell nearly 1.0% to $446.0 billion in 2007. The industry’s combined ratio deteriorated modestly to a still profitable 94.9 in 2007, up from 92.2 in 2006. Strong operating results pushed policyholder surplus up by 7.1% to $527.5 billion in 2007 from $492.8 billion at year-end 2006. Total catastrophe losses were an estimated $6.7 billion in 2007—among the lowest years on record, down from $9.2 billion in 2006. The personal lines segment’s underwriting results remained strong on favorable but flattening private passenger auto loss-frequency trends, moderate but increasing loss-severity trends and a lack of significant catastrophes. The commercial lines segment reported its second consecutive underwriting profit in 2007, reflecting continued underwriting discipline, favorable loss-reserve development and mild catastrophe losses. The U.S. reinsurance segment reported a combined ratio of 94.4 in 2007, slightly better than the 94.9 reported for 2006. The U.S. P/C industry is projected to record a modest underwriting gain in 2008, as insurers are expected to maintain the delicate balance between growth opportunities and profitability. BestWeek subscribers can download a PDF copy of all full special reports at no additional cost or a combination of the PDF copies plus all related spreadsheet files of the report data at no additional cost from our Web site at www.bestweek.com. Nonsubscribers can download a PDF copy of the full special report (8 pages) for $55 or a combination of the PDF copy plus the spreadsheet file of the report data for $140 from our Web site at www.bestweek.com. Call customer service for more information, (908) 439-2200, ext. 5742. Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com. Return to today's INSURANCE NEWSCAST
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