The US property and casualty sector recorded a $US3.8 billion ($5.6 billion) net underwriting gain in its latest six-month results, rebounding from a $US24 billion loss ($35.5 billion) a year earlier as personal lines improved, AM Best says. 

Net earned premium grew 11.3%, offsetting a 2.5% increase in incurred losses and loss adjustment expenses and a 24.9% rise in other underwriting expenses.  

 AM Best says the combined operating ratio improved to 97.7%, with catastrophe losses accounting for 7.4 points. That compares with a ratio of 104.4% a year ago, when record severe convective storm losses contributed to a 9.7-point catastrophe impact. 

Excluding $US8 billion ($11.8 billion) of favourable reserve development during the first six months, the industry’s accident year combined operating ratio was 99.4%. 

The underwriting gain, plus a 26.6% increase in earned net investment income, drove pre-tax operating income up 374.4% to $US47.3 billion ($70 billion). 

A $US50 billion ($74 billion) change in net realised capital gains at National Indemnity Company resulted in industry net income soaring from $US9.4 billion ($13.9 billion) in the first half of last year to $US97.6 billion ($144.5 million). 

AM Best says the data is derived from companies whose interim statutory statements were received as of September 4, which accounts for an estimated 99% of industry net premium written.