New figures reveal extent of US insurance losses
New results showing a 96.2% drop in profits for America’s property and casualty insurers last year reflect a hammering by catastrophe losses and the financial crisis.
The data, contained in a joint report by the Insurance Services Office and the Property Casualty Insurers Association of America, shows net profit of $US2.4 billion ($3.3 billion) last year, compared with $US62.5 billion ($86.7 billion) in 2007.
In the fourth quarter there was a net loss of $US1.7 billion ($2.4 billion), compared with a $US12.9 billion ($17.9 billion) profit in the corresponding period of 2007.
The combined ratio was 105.1% for last year, compared with 95.5% the year before.
A $US21.2 billion ($29.4 billion) net loss in underwriting for 2008 contrasted starkly with the $US19.3 billion ($26.8 billion) net gain a year earlier.
Last year’s hurricane season added $US14.8 billion ($20.5 billion) in net catastrophe losses to the 2007 figure. The final figure came in at $US21.8 billion ($30.3 billion) after reinsurance recoveries of $US4.2 billion ($5.8 billion).
Tumbling share prices and interest on bonds slammed insurers’ net investment gains, cutting them by 50.9% last year to $US31.4 billion ($43.6 billion).
The report says America’s general insurance industry remains well capitalised in spite of a $US62.3 billion ($86.5 billion) – or 12% – drop in underwriting profit in 2008.
The data, contained in a joint report by the Insurance Services Office and the Property Casualty Insurers Association of America, shows net profit of $US2.4 billion ($3.3 billion) last year, compared with $US62.5 billion ($86.7 billion) in 2007.
In the fourth quarter there was a net loss of $US1.7 billion ($2.4 billion), compared with a $US12.9 billion ($17.9 billion) profit in the corresponding period of 2007.
The combined ratio was 105.1% for last year, compared with 95.5% the year before.
A $US21.2 billion ($29.4 billion) net loss in underwriting for 2008 contrasted starkly with the $US19.3 billion ($26.8 billion) net gain a year earlier.
Last year’s hurricane season added $US14.8 billion ($20.5 billion) in net catastrophe losses to the 2007 figure. The final figure came in at $US21.8 billion ($30.3 billion) after reinsurance recoveries of $US4.2 billion ($5.8 billion).
Tumbling share prices and interest on bonds slammed insurers’ net investment gains, cutting them by 50.9% last year to $US31.4 billion ($43.6 billion).
The report says America’s general insurance industry remains well capitalised in spite of a $US62.3 billion ($86.5 billion) – or 12% – drop in underwriting profit in 2008.