US P&C sector makes $5.3bn underwriting profit in H1
The US property/casualty industry’s net underwriting income improved in the first half of 2018 to $5.3 billion, compared with a $5.0 billion underwriting loss in the same prior-year period, according to data by AM Best.
The first-half 2018 underwriting results were driven by growth in net premiums written of 13.3 percent over the prior-year period. At the same time the sector incurred a 3.8 percent increase in losses and loss adjustment expenses (LAE), a 12.9 percent rise in underwriting expenses and a 10.1 percent increase in policyholder dividends. With a more normalized level of catastrophe losses in the first half of 2018, the industry’s combined ratio improved 4.5 points from the prior-year period to 96.4, the lowest six-month period combined ratio for the last five years.
The property/casualty industry also recorded a $3.7 billion increase in net investment income and a $2.0 billion increase in realized capital gains. Coupled with the strong underwriting improvement, these items boosted industry net income to $33.6 billion, an $18.7 billion increase from the prior-year period, the report noted.
The financial review detailed in the report titled, “AM Best First Look— First Half 2018 Property/Casualty Financial Results,” represents an estimated 97 percent of the total property/casualty industry’s net premiums written.
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