US P&C insurers suffer $4.7bn underwriting loss in 2016
US property and casualty insurers reported a $4.7 billion net underwriting loss in 2016, com-pared to an $8.9 billion net underwriting gain in 2015. Their net income after taxes dropped 25 percent to $42.6 billion from $56.8 billion the previous year.
Furthermore, insurers' combined ratio deteriorated to 100.7 percent in 2016 from 97.8 percent in 2015, and net written premium growth slowed to 2.7 percent in 2016 from 3.5 percent a year earlier.
This is according to the data from ISO, a Verisk Analytics business, and the Property Casualty Insurers Association of America (PCI).
ISO Solutions president Beth Fitzgerald suggested that both catastrophe and legacy losses continue to hurt insurer performance in 2016.
“There were 43 catastrophe events in 2016, the highest number of such events since 1980,” Fitzgerald said. “There's no way around it-to underwrite catastrophic risk better, insurers need detailed and accurate analytics of weather and environmental perils.”
She continued: “But last year's catastrophe losses weren't the only ones that affected insurers. Legacy losses also continued to hurt performance and were evidenced by reserve charges and several special reinsurance transactions designed to limit the development of carried reserves.
“Those legacy issues should serve as a strong reminder that insurers need to engage in disci-plined underwriting now or pay the price for it later. Those insurers that use robust data and up-to-date policy language will be the best poised for success."
Catastrophes striking the US resulted in direct insured property losses of $21.6 billion in 2016, up from $15.2 billion the previous year and above the $19.2 billion average direct ca-tastrophe losses for the past ten years.
Today’s stories
Munich Re posts strong Q1 growth; notes slight easing in pricing pressure
Hiscox enjoys strong growth overall but reinsurance unit shrinks
Towergate Insurance returns to loss in Q1
Hiscox unveils plans for EU subsidiary in response to Brexit
Markel International bolsters Singapore branch with marine underwriter
Profits rise at Enstar but it warns on challenging market conditions
RMC Group targets Europe from new UK office
Maiden enjoys growth but its profit is hit by casualty losses
Twelve Capital hires director to focus on cat bond strategies
PERILS expects losses of $823m from Tropical Storm Debbie
PineBridge Investments hires former Aviva investment specialist
Did you enjoy reading this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
