Lower cat losses drive underwriting gains for US property and casualty industry

17-01-2020

The private US property and casualty insurance industry saw its net underwriting gains increase to $5.4 billion in the first nine months of 2019, from $4.7 billion a year earlier, according to Verisk, a data analytics company, and the American Property Casualty Insurance Association (APCIA).

These underwriting gains were bolstered by growth in premiums and a drop in catastrophe losses, Verisk said. Net losses and loss adjustment expenses from catastrophes declined to $21.5 billion for the first nine months of 2019, from $26 billion in the same period of 2018.

These trends, and the strong performance of the equities markets, saw the industry’s surplus grow $70.1 billion in the first nine months of 2019, according to Verisk. That took the overall surplus to a record high of $812.2 billion. 

The industry’s net income after taxes declined to $48.1 billion for nine months of 2019, slightly down on the $49.4 billion earned in the corresponding period of 2018. Insurers’ combined ratio deteriorated to 97.8 percent, from 97.4 percent the previous year. 

Net written premium growth slowed to 2.7 percent in nine-months 2019, after jumping 11.4 percent a year earlier. “In both years growth was significantly affected by one-time increases in net written premiums caused by the changes multiple insurers made to their reinsurance arrangements in 2018,” said Verisk.  

Neil Spector, president of ISO, a division of Verisk, said: “As competition grows and customer expectations rise, insurers increasingly need to boost the speed and precision of their decisions, from underwriting to claims. Those carriers equipped with robust data, powerful analytics, and experienced talent will be the best poised to meet the challenges that lie ahead.”

Robert Gordon, senior vice president for policy, research and international, at APCIA, said the industry’s results were indicative of “a strong industry with a rock-solid foundation that enables consumers to rest assured that they will be protected when they need it most.”

Verisk, American Property Casualty Insurance Association, APCIA, Neil Spector, Robert Gordon

Bermuda Re