US private property and casualty insurers reported a $US1.5 billion ($2 billion) first-half underwriting loss, sliding into the red during the period for the first time since 2012.

Net income after tax dropped to $US21.7 billion ($28.5 billion) from $US31 billion ($40.7 billion) in the corresponding period last year, according to analyst ISO Solutions and the Property Casualty Insurers Association of America.

“Catastrophe losses remained higher than in previous years,” ISO Solutions President Beth Fitzgerald said. “Texas was hit by a hailstorm that has been described as the costliest in the state’s history, and several states in the central US experienced severe thunderstorms.

“With interest rates and investment yields remaining low, insurers must find ways to improve operational efficiency while still providing valuable coverage for their policyholders.”

Primary insured property losses from catastrophes totalled $US13.5 billion ($17.7 billion) in the half, up from $US10.7 billion ($14 billion) in the corresponding period last year and above the $US11.6 billion ($15.2 billion) 10-year average.

The industry’s combined operating ratio deteriorated to 99.8% from 97.6% and net written premium growth slowed to 3% from 4.1%.

Net investment income dropped to $US22.1 billion ($29 billion) from $US23.4 billion ($30.7 billion).

Ms Fitzgerald says the underperformance of auto insurance continues to drag on industry underwriting results.

“Industry statistics we’re monitoring indicate [primary] personal and commercial auto liability losses each spiked more than 11% from the first half of 2015, significantly outstripping premium growth.”

In the second quarter, insurers’ net income after tax fell to $US8.3 billion ($10.9 billion) from $US12.9 billion ($16.9 billion), and the combined operating ratio deteriorated to 102.1% from 99.4% a year earlier.