US property and casualty insurers reported a 50% rise in net income last year on lower catastrophe losses and higher earned premiums, according to Moody’s.

Catastrophe losses were high following Superstorm Sandy, but were down on 2011.

“In addition, investment income increased modestly while reserve releases were down for most companies from the prior year, continuing their moderating trend,” Moody’s Assistant VP Enrico Leo said.

Favourable pricing momentum and a gradually improving economy – coupled with relatively benign loss cost trends – are expected to benefit accident year loss ratios and underwriting margins this year, excluding catastrophes.

Retention ratios should remain stable but low investment yields will continue, the ratings agency predicts.