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Best’s News & Research Service - May 24, 2017 01:00 PM (EDT)

A.M. Best Special Report: Preliminary First-Quarter 2017 Results Show Underwriting Losses for U.S. P/C Industry Persisting

  • May 24, 2017 01:00 PM (EDT)
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Oldwick //BestWire// - The U.S. property/casualty industry posted a first-quarter 2017 net underwriting loss of $841.5 million, according to preliminary financial results, continuing the industry’s underwriting loss trend seen in 2016. The first-quarter loss was significantly less than the $2.0 billion net underwriting profit reported in first-quarter 2016, and was the only first-quarter underwriting loss reported in the last five years. This financial review is detailed in a new Best’s Special Report, titled, “A.M. Best First Look—1Qtr 2017 U.S. Property/Casualty Financial Results,” and the data is derived from companies’ three-month 2017 interim statutory statements that were received as of May 17, 2017, representing an estimated 96% of the total property/casualty industry’s net premiums written.

According to the report, net investment income grew 9.5% to $11.9 billion during first quarter 2017; however, nearly half of that was offset by a $5.9 billion loss in other income, reflecting the impact of a retroactive reinsurance contract entered into in February 2017 by American International Group, Inc. (AIG) and National Indemnity Company.

Net income fell to $7.3 billion in first-quarter 2017, a 45.2% decline in net income from the prior-year period. Despite the significant decline, partly due to the AIG reinsurance contract, industry surplus reached a record $696.9 billion at the end of March 2017, driven by an $8.5 billion increase in unrealized gains, an increase in other surplus gains and a reduction in stockholder dividends.

A.M. Best estimates the property/casualty industry’s three-month 2017 combined ratio deteriorated to 99.7, compared with 97.7 in the same prior-year period. Estimated catastrophe losses of $7.6 billion, up 48% from the first-quarter 2016, accounted for 6.0 points on the combined ratio, 1.8 catastrophe points higher than what was seen in first-quarter 2016.

To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=261920 .

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.



Property And Liability Insurers Property And Casualty Insurance Press Release A.M. Best Rating Services, Inc. Insurance Property And Casualty Insurers


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