US property and casualty insurers recorded a 25.2% decline in net income to $US35.5 billion ($48.2 billion) for the nine months to September from a year earlier, according to data compiled by AM Best.

Catastrophe losses and a $US4.4 billion ($6 billion) fall in realised capital gains pressured earnings, as did the business fallout from COVID-19.

“The still developing story for 2020 revolves largely around the impacts of COVID-19 and catastrophe losses,” AM Best says in a report.

“We see somewhat greater changes in line of business underwriting results than normal, with favorable results for the personal lines segment and deteriorating results for the commercial and reinsurance segments.

“We expect these trends to extend into fourth quarter 2020 results.”

The combined ratio for the period weakened 0.7 percentage points to 98.7%, with the share from catastrophe losses rising to 8.3 points from 4.4 points a year earlier, AM Best said.

Net written premiums improved 3.1% to $US486.1 billion ($659.8 billion) and underwriting expenses increased 4.4% to $131.4 billion ($178.4 billion) as some businesses recorded policyholder credits as an underwriting expense rather than a reduction of premium.

The AM Best report is based on statutory statements from insurers that make up 97% of overall net premium written in the US market.