Disaster-hit US insurers run up large losses
The US property and casualty industry was in the red for a second consecutive year in 2017, with a larger net underwriting loss of $US29.3 billion ($37.4 billion), AM Best says.
In 2016 the industry made a $US6.5 billion ($8.3 billion) underwriting loss.
Pre-tax operating income fell sharply to $US14.8 billion ($18.9 billion) from $US41.1 billion ($52.5 billion). The combined operating ratio blew out to 105.1% from 100.9%.
Predictions that catastrophe losses would support rate rises in the reinsurance market have proven wide of the mark, the ratings agency says.
“Loss-affected accounts are seeing substantial rate increases, but most companies are seeing reinsurance prices remaining flat or rising only slightly.”
AM Best expects rate rises to remain in the low single digits for most lines in the US this year.