The third-quarter earnings of US property and casualty insurers fell sharply due to catastrophe losses, says Moody’s Investor Service in a report on publicly traded insurers.

But Moody’s notes that the group collectively reported a net profit, and capital remains strong despite losses from Hurricane Irene adding to claims from winter storms and tornadoes.

Assistant VP Enrico Leo says net written premium was up on the previous year and companies reported rate increases in personal lines and increased exposures and rates in commercial lines.

He says operating margins over the next 12 months are likely to be influenced by tapering reserve releases, low investment yields, catastrophe losses and sluggish economic growth.

“Moody’s expects that, collectively, these factors should help fuel further pricing improvement for the P&C sector.”

Mr Leo says there is still significant competition for new business. Renewal rates for commercial lines continue to show signs of stabilisation and modest improvement after six years of rate declines.