US insurers remain resilient in the face of an otherwise moribund economy, more than doubling net income in the first half despite a steep increase in underwriting losses.

Figures collected by the Insurance Information Institute (III), the Property Casualty Insurers Association of America (PCI) and consultant ISO show a so-called “conservative investment strategy” has paid off handsomely for the US property and casualty market, which reaped $US25.9 billion ($27.57 billion) in investment income and capital gains for the first sixth months of 2010 – more than double the $US12.5 billion ($13.3 billion) collected over the same period last year.

US insurers’ total net income after tax for the first half was $US16.5 billion ($17.56 billion) – nearly triple its first-half result from 2009, despite net losses on underwriting reaching $US5.1 billion ($5.42 billion), up from $US2.1 billion.

But the results make it “easy to overlook the ongoing challenges facing insurers”, ISO Assistant Vice President Michael Murray said.

“With the recovery from the great recession remaining agonisingly slow and competition in commercial insurance markets continuing to escalate, top-line premiums remained flat and insurers’ rate of return remained far below benchmarks like the 13.9% long-term average rate of return for the Fortune 500 [companies],” he said.