The private U.S. property/casualty insurance industry saw its net underwriting gains increase to $5.4 billion in the first nine months of 2019 from $4.7 billion a year earlier, bolstered by growth in premiums and a drop in catastrophe losses.
The industry also boosted its surplus to a record high of $812.2 billion, according to data analytics firm Verisk and the American Property Casualty Insurance Association (APCIA).
The surplus grew $70.1 billion in nine-months 2019 as the stock market recovered from a significant downturn at the end of 2018.
The industry’s net income after taxes and underwriting gains remained strong despite small declines compared with the prior year. Net income after taxes declined to $48.1 billion for nine-months 2019 from $49.4 billion a year earlier, and insurers’ combined ratio deteriorated to 97.8% from 97.4% a year earlier. Net losses and loss adjustment expenses from catastrophes declined to $21.5 billion for nine-months 2019 from $26.0 billion a year earlier.
Net written premium growth slowed to 2.7% in nine-months 2019, after jumping 11.4% a year earlier; in both years, growth was significantly affected by one-time increases in net written premiums caused by the changes multiple insurers made to their reinsurance arrangements in 2018. Net earned premiums grew 4.7%.
“The strong economy, along with a drop in catastrophe losses, has helped insurers continue to enjoy strong results and build a record surplus,” said Neil Spector, president of ISO.
“The U.S. property/casualty insurers’ financial results during the first nine months of 2019 paint a picture of a strong industry with a rock-solid foundation that enables consumers to rest assured that they will be protected when they need it most,” said Robert Gordon, senior vice president for policy, research and international, at APCIA.