A review of results for Moody’s-rated property and casualty insurers shows the industry’s net income is up substantially in the first quarter – around 70% more than the corresponding period last year.

Moody’s says that a number of key factors have driven this, including a relatively quiet quarter for catastrophes.

Rate increases across the board have also been recorded, a trend following on from the last quarter of 2011.

Reserve releases continue to support US insurers’ earnings, though to a much lesser degree than previously. Moody’s suggests that an area to watch is workers’ compensation, where some companies are reporting continued “adverse reserve development” in the first quarter.

Low bond yields have impacted negatively on investment income while capital adequacy “remains solid”.

Overall, Moody’s says there are signs of an improving insurance market, but growth will be hindered by economic sectors such as construction and transportation.

Premium growth for 2012 is expected to continue as insurance companies look for further rate improvements in the backdrop of a slowly recovering economy.

However, catastrophes continue to remain one of the industry’s key risks, particularly as the US hurricane season approaches.