The US property and casualty industry’s after-tax profits plummeted 57% to $US13.9 billion ($17.5 billion) during the first half of the year, according to a joint industry report.

The Insurance Services Office (ISO) and the Property Casualty Insurers of America report reveals net written premium dropped 1% to $US221.9 billion ($278 billion) in the first six months of the year, due to escalating competition and continuing discounts on premiums.

The ISO, which compiles statistical insurance information, says the industry’s declining profit is chiefly due to underwriting losses and deteriorating investment results.

Insurers suffered $US5.6 billion ($7.1 billion) in underwriting losses to June 30 2008, compared with net gains of $US14.5 billion ($18.2 billion) in the same period last year.

Net investment gains fell 18% to $US24.8 billion ($31 billion) and the combined ratio blew out by more than nine points to 102%.

“Mortgage and financial guarantee insurers account for a significant amount of the deterioration in underwriting results for the industry overall,” ISO Assistant VP Michael Murray said.