US property and casualty (P&C) insurers increased their earnings by 54% last year, according to Moody’s.

Analyst Ji Liu says lower catastrophe losses and better underwriting margins drove the improvement.

“Underlying combined ratios continued to improve, with compound earned rate increases outpacing relatively benign loss-cost trends.”

The ratings agency expects competition among P&C insurers to increase this year, due to the industry’s strong capital base and improved profitability.

“Casualty pricing will continue to increase, albeit at a slower pace, as insurers seek to compensate for low market interest rates on their investments and to improve underwriting results in certain lines of business,” Moody’s says.

Barring significant catastrophes, pressure on commercial property rates will increase as the year progresses.

Severe snowstorms that hit the US in January and last month will affect some insurers’ margins for the first quarter.