US property and casualty insurers’ net income after tax grew 41.2% to $US14.4 billion ($15.5 billion) in the first quarter of this year.

The improvement was driven by underwriting profits of $US4.6 billion ($4.9 billion), up from a $US100 million ($110 million) net loss in the corresponding period last year, according to figures from risk analyst ISO and the Property Casualty Insurers Association of America.

They were the first underwriting gains since the fourth quarter of 2009 and reflect a combination of premium growth, increased reserve releases and lower weather-related catastrophe losses, the report says.

Insurers’ annualised rate of return on average policyholders’ surplus increased to 9.6% from 7.2%, approaching the long-term average of 10%.

The combined ratio was 94.8%, a 4.2 percentage-point improvement from 99% in the first quarter of last year.

Investment gains were also stronger, growing 4% to $US12.8 billion ($13.7 billion) as writedowns on impaired investments dropped.

However, federal and foreign income taxes grew 26% to $US2.9 billion ($3.1 billion).

Policyholders’ surplus – insurers’ net worth measured according to statutory accounting principles – increased 3.5% to a record $US607.7 billion ($651.9 billion) compared with the December quarter last year.

The high surplus provides confidence that insurers have the resources to fulfil their obligations, according to the association’s Senior VP for Policy Development and Research Robert Gordon.

“Insurers are strong, well capitalised and well prepared to pay future claims.”