Profit margins in the US property and casualty insurance sector are under pressure, despite the sector reaching a record $US32.6 billion ($36 billion) in net income for the first half of the year.

Net income grew 11% compared with the first six months of last year, but profit margins slipped slightly to 13.1%, from 13.5%.

The data compiled by the Insurance Services Office, a New Jersey insurance think tank, and the Property Casualty Insurers Association (PCIA) covers 96% of insurers in the sector. It shows the industry is well capitalised, but falling premiums are having an effect on profitability.

Stagnant growth in net written premium - just 0.1% - also has industry watchers concerned, prompting PCIA chief economist Genio Staranczak to link flat sales with market competition.

Surpluses rose 5.5% compared with the first half of last year to $US513 billion ($581 billion), but net gains on underwriting fell 4.1%.

The industry's combined ratio, which measures profitability, improved marginally to 92%.