US property and casualty insurers staged a comeback last year as lower claims and improving investment returns provided a shot in the arm for the industry.

Net profit surged to $US28.3 billion ($30.4 billion) last year from just $US3 billion ($3.2 billion) in 2008. The rise was driven by a $US31.3 billion ($33.7 billion) reduction in claim costs and $US7.3 billion ($7.9 billion) rise in investment gains.

Despite the improved result, the combined ratio remained under the line at 101%, although it was an improvement on 105% the previous year.

Overall net profit also remained well down on the $US62.5 billion ($67.2 billion) earned by insurers in 2007.

The Insurance Services Office and the Property Casualty Insurers Association of America (PCI) released a snapshot report on the US industry last week.

PCI President David Sampson says the results show US insurers remain well placed to fulfil their obligations.

“While attention has been focused on consumers’ ability to obtain mortgages and on businesses’ access to credit, people would not be able to buy homes or autos, and businesses would not be able to operate, without the property casualty industry.”