US property and casualty (P&C) insurers reported a collective net income of $US13.8 billion ($14.7 billion) in the first quarter of this year, new statistics show.

The figure is down from $US14.3 billion ($15.2 billion) in the corresponding quarter last year, according to the Property Casualty Insurers Association of America (PCI) and analyst ISO.

Pre-tax operating income fell to $US13.7 billion ($14.6 billion) from $US15.8 billion ($16.8 billion) due to poor underwriting results.

The combined operating ratio deteriorated to 97.3% from 94.9%.

Net gains on underwriting dropped as premium growth slowed, and net loss and loss adjustment expenses grew for the first time since Superstorm Sandy struck in late 2012.

Insurers’ net investment returns increased by $US1.3 billion ($1.4 billion) to $US14.1 billion ($15 billion) in the quarter, partially offsetting the decline in net gains on underwriting.

Policyholders’ surplus – funds available to cover new claims – increased by $US8.7 billion ($9.3 billion) to a record high of $US662 billion ($706 billion).

PCI Senior VP Policy Development and Research Robert Gordon says there should be no doubt insurers are strong, well capitalised and capable of paying future claims.

“Policyholders can rely on insurers to fulfil their obligations and help finance economic recovery.”

Net written premiums grew 3.6% to $US121.4 billion ($129.5 billion) in the first quarter – the slowest growth rate since the first quarter of 2012, when written premiums increased 3%.

Mr Gordon says premium growth among commercial lines insurers was particularly weak.

Increases in catastrophe and non-catastrophe losses contributed to the surge in overall loss expenses.

ISO estimates private US insurers’ net loss expenses from catastrophes increased to $US3.2 billion ($3.4 billion) in the first quarter from $US2.5 billion ($2.7 billion) in the corresponding period last year.

This is primarily attributable to catastrophes in the US; the impact of catastrophes outside the country is considered “immaterial”.

The figures are consolidated estimates for all private P&C insurers, based on reports accounting for at least 96% of all business written.