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Insurers Have Proven Resilient During Economic Downturn

Bolstered by a risk management model that is superior to the one employed by banks, U.S. property/casualty (P/C) insurers have weathered the current global financial...
April 14, 2009

Bolstered by a risk management model that is superior to the one employed by banks, U.S. property/casualty (P/C) insurers have weathered the current global financial crisis with their operating model - the orderly transfer of risk from policyholder to insurer - intact. This has enabled P/C insurers to continue paying claims and sell and renew policies, according to Dr. Robert Hartwig, president of the Insurance Information Institute (I.I.I.), in remarks made April 10 to the annual gathering of the National Hurricane Conference.

Moreover, Dr. Hartwig noted that P/C insurers remained profitable in 2008, despite financial market turmoil and a deep recession, earning $2.4 billion in net income after taxes. That figure was nonetheless down $60.1 billion, or 96.2 percent, from the $62.5 billion profit in net income after taxes P/C insurers realized in 2007, largely because of the poor investment environment and higher losses on insurance operations. The latter was driven by $26 billion in insured catastrophe losses - the fourth highest total ever.

Industry Remains Resilient, Well-Capitalized (I.I.I. 4/10/09)

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