US insurers enjoy underwriting profit despite premium slide
The US property/casualty insurance industry has recorded its second consecutive underwriting profit despite net written premium falling for the first time in more than six decades.
The industry’s underwriting profit of $US22 billion ($23.6 billion) fell short of last year’s $US32 billion ($34 billion) record, while net written premium shed 1% to $US446 billion ($476 billion), the first drop in premium since 1943.
Global rating agency AM Best has released a report showing the industry’s net income fell 7% to $US66.5 billion ($71 billion), with after-tax return on equity slipping to 13%.
Net written premium fell as a result of softening in personal and commercial lines pricing, leakage of premium and a growing interest in alternative forms of risk transfer.
AM Best is projecting a modest underwriting gain this year as insurers are expected to maintain the “delicate balance between growth opportunities and profitability”.
The industry’s underwriting profit of $US22 billion ($23.6 billion) fell short of last year’s $US32 billion ($34 billion) record, while net written premium shed 1% to $US446 billion ($476 billion), the first drop in premium since 1943.
Global rating agency AM Best has released a report showing the industry’s net income fell 7% to $US66.5 billion ($71 billion), with after-tax return on equity slipping to 13%.
Net written premium fell as a result of softening in personal and commercial lines pricing, leakage of premium and a growing interest in alternative forms of risk transfer.
AM Best is projecting a modest underwriting gain this year as insurers are expected to maintain the “delicate balance between growth opportunities and profitability”.