Net income among a group of private U.S. property/casualty insurers dropped 15.8% to $36.12 billion in 2017 compared with 2016, while the group’s combined ratio worsened to 103.7% in 2017 compared with 100.6% in 2016, according to a report Monday from ISO, part of Verisk Analytics Inc., and the Property Casualty Insurers Association of America.
This study defines the U.S. property/casualty insurance industry as all private property/casualty insurers domiciled in the United States, including excess and surplus insurers and domestic insurers owned by foreign parents but excluding state funds for workers compensation and other residual market carriers. The figures are consolidated estimates based on reports accounting for at least 96% of all business written by U.S. property/casualty insurers available as of April 15, 2018. All figures are net of reinsurance unless otherwise noted and occasionally may not balance due to rounding.
Net underwriting losses jumped to $23.22 billion in 2017 from $4.71 billion a year earlier, the report said.
Net written premiums, however, grew by 4.6% to $552.57 billion in 2017 vs. 2016, the highest net written premium growth rate since 4.9% in 2004, and up from 2.7% in 2016, the report said.
Net investment income grew 5.2% to $48.97 billion in 2017 vs. 2016, the report said.
The three hurricanes which made landfall in the U.S. in fall of 2017 drove the industry’s underwriting loss, according to ISO and PCI officials.
“Three major hurricanes and devastating wildfires resulted in significant underwriting losses for insurers in 2017, suppressing the industry’s income but failing to erode its capital,” Neil Spector, Jersey City, New Jersey-based president of ISO, said in a statement issued with the report.
The catastrophe losses, however, did not stop the industry from increasing its surplus, which grew 7.4% to a new record high $752.5 billion as of Dec. 31, 2017.
“During the second half of 2017, insurers weathered one of the most challenging series of catastrophic loss events in U.S. history,” Robert Gordon, PCI’s Washington-based senior vice president for policy, research and international, said in the statement. “Yet, despite hurricanes Harvey, Irma and Maria, along with devastating wildfires in California, industry surplus grew to record levels.”
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