Cat losses cause US P&C sector profit drop 42.2% YOY in Q1
The private US property/casualty insurance industry saw its net income after taxes drop 42.2 percent year-on-year to $7.7 billion in the first-quarter of 2017, according to ISO, a Verisk Analytics business.
The overall profitability of the sector as measured by its annualized rate of return on average policyholders' surplus fell to 4.4 percent from 7.9 percent over the period.
The industry experienced $7.3 billion in direct catastrophe losses, the highest first-quarter catastrophe losses since the 1994 Northridge earthquake and $2.3 billion above the direct catastrophe losses for first-quarter 2016. Insurers' combined ratio deteriorated to 99.6 percent for first-quarter 2017 from 97.4 percent for first-quarter 2016.
"Three major wind and thunderstorm events each resulted in more than $1 billion in damages in first-quarter 2017,” said Beth Fitzgerald, senior vice president, industry engagement at ISO.
“That's the first time we've seen three events of that magnitude in the first quarter in more than 60 years.”
At the same time, net written premium growth in the US P&C sector accelerated to 4.0 percent for first-quarter 2017 from 3.2 percent for first-quarter 2016. Net investment gains increased by $1.2 billion to $14.4 billion in the first-quarter of 2017 from $13.2 billion for the first-quarter of 2016. The industry's surplus reached a new all-time high value of $709.0 billion as of March 31, 2017, increasing $8.1 billion from $700.9 billion as of December 31, 2016.
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