US property and casualty (P&C) insurers recorded a 42% rise in profit for the six months to June 30, as premiums increased and losses fell.

Overall after-tax profit grew to $US24.5 billion ($26.09 billion), driven by a better operating performance and higher investment results, according to the Property Casualty Insurers Association of America (PCI) and risk analyst ISO.

The combined ratio improved to 97.9% from 101.9%, data on 96% of all business written by private P&C insurers shows.

Pre-tax operating income grew 34% to $US25.8 billion ($27.48 billion), driven by underwriting gains.

Net written premium gained 4.5% to $US237.25 billion ($252.65 billion) and direct insured losses from catastrophes dropped 37% to $US9.7 billion ($10.33 billion).

Net investment income increased 6% to $US27.1 billion ($28.86 billion).

ISO Assistant VP Financial Analysis Michael Murray says the results were better than last year but still below historical norms.

“Insurers now need much better underwriting results just to be as profitable as they were in the past,” he said.

PCI Senior VP Policy Robert Gordon says policyholders’ surplus hit a record high of $US614 billion ($653.87 billion) at June 30.

“Insurers are strong, well capitalised and well prepared to pay future claims,” he said. “Despite expert predictions that [this year’s] hurricane season would be very active, we have been lucky so far.”