Press Release - MAY 24, 2018

A.M. Best Special Report: Preliminary First-Quarter 2018 Results Show Underwriting Turnaround for U.S. P/C Industry


CONTACTS:
 Matthew Coppola
Associate Director
– Corporate Data Management
+1 908 439 2200, ext. 5627
matthew.coppola@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

FOR IMMEDIATE RELEASE

OLDWICK - MAY 24, 2018
The U.S. property/casualty (P/C) industry posted net underwriting income of $3.9 billion in first-quarter 2018, according to preliminary financial results, a turnaround from the industry’s underwriting loss trend seen in in recent years. For the quarter, P/C insurers posted a combined ratio of 94.8, the lowest three-month combined ratio of last five years. This financial review is detailed in a new Best’s Special Report, titled, “First Look—1Q2018 U.S. Property/Casualty Financial Results,” and the data is derived from companies’ three-month 2018 interim statutory statements that were received as of May 17, 2018, representing an estimated 95% of the total property/casualty industry’s net premiums written.

According to the report, increases in net and earned premiums written drove the underwriting improvement, which offset a 3.1% increase in losses and loss adjustment expenses incurred and a 12.7% rise in underwriting expenses and policyholder dividends. Following 2017 when catastrophe caused record insured losses, catastrophe losses returned to a more normalized level in first-quarter 2018. A.M. Best estimates that catastrophe losses accounted for 3.4 points on the three-month 2018 combined ratio, down from an estimated 6.0 points in the prior-year period.

P/C industry results also reflect a $600 million increase in net investment income and a $1.3 billion increase in realized capital gains. In addition, a $5.9 billion loss in other income in 2017 from a retroactive reinsurance contract entered into by American International Group, Inc. and National Indemnity Company was not repeated in the current period. These factors, along with the strong underwriting results, boosted the P/C industry’s net income to $17.4 billion in first-quarter 2018, a $10 billion improvement from the prior-year period.

To access a copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=273839 .

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