US property and casualty insurers are expected to record a $US12.1 billion ($16.9 billion) underwriting loss for last year, AM Best says.

The industry has been recording underwriting deficits since 2016, with losses of $US6.5 billion ($9.1 billion) that year and $US25.3 billion ($35.4 billion) in 2017.

Pre-tax operating income is estimated to have more than doubled to $US42.7 billion ($59.8 billion) last year, while the combined operating ratio improved to 101.5% from 104%.

Hurricane Michael and Californian wildfires pushed net catastrophe losses above $US37 billion ($51.8 billion) – the second-highest sum since 2011, but well down from $US53 billion ($74.2 billion) in 2017.

While catastrophe losses are likely to decline this year to $US31 billion ($43.4 billion), insurers can expect the rate environment to remain tough for commercial lines.

“AM Best expects pricing for loss-impacted accounts to be stronger in both the insurance and reinsurance segments, but loss-free accounts and those with limited catastrophe exposure may continue to see lower premiums,” the ratings agency says.

“Continued declines in property pricing in the primary market may be driving some of the increase in the industry’s normalised accident-year loss ratio.”