A.M. Best: U.S. P/C Industry Results Rebound- From the Insurance Journal-
The U.S. property/casualty industry reported a strong fourth quarter topping off a solid year, according to rating analysts.
Net income climbed to $31.1 billion in 2009, driven by improved underwriting results, the continued recovery of the financial markets and disciplined capital management, said A.M. Best Co.
The rating agency said the industry’s underwriting results were buoyed by a quiet hurricane season, significant reserve releases and a sizable reduction in underwriting losses in the mortgage and financial guaranty segments. The industry’s much improved investment returns were driven by the significant upturn in the financial markets in 2009.
The rating agency noted that for the first time in A.M. Best Co.’s recorded history, net premiums written (NPW) have declined in three consecutive years. NPW fell approximately 5.9% to $419.3 billion in 2009.
The industry’s combined ratio improved to 101.2 in 2009, down approximately 3.0 percentage points from 104.0 recorded in 2008.
Overall net investment gains also increased approximately 31 percent to $43.5 billion in 2009 from $33.1 billion in 2008.
A.M. Best’s data shows the industry recognized about $11.0 billion of favorable prior year loss reserve development in 2009.
Also, the agency reported that the U.S. P/C industry’s policyholders’ surplus position rebounded by approximately 9 percent to $519.3 billion in 2009 from $477.2 billion at year-end 2008.
“The overall industry’s conservative operating strategy and effective capital management leave it sufficiently capitalized to navigate the underwriting cycle and volatility in the financial markets, but challenges remain,” A.M. Best wrote in its special report.
Source: A.M. Best Company www.ambest.com
Original Article here- http://www.insurancejournal.com/news/national/2010/04/26/109289.htm