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P/C Insurers Remained Financially Strong in Q1, Premiums Trend Upward

In a quarter marred by megacastastrophes around the globe, the U.S. property/casualty (P/C) insurance industry reported an annualized statutory rate of return on average surplus...
June 29, 2011

In a quarter marred by megacastastrophes around the globe, the U.S. property/casualty (P/C) insurance industry reported an annualized statutory rate of return on average surplus of 5.6 percent during the first quarter of 2011, down from 6.8 percent from the year earlier quarter and 6.5 percent for all of 2010. Profitability receded despite a $1 billion improvement in investment earnings during the quarter and a surprising 3.5 percent surge in net premiums written, the strongest quarterly growth since the fourth quarter of 2006.

In one of the most positive developments for the industry since the end of the financial crisis, premium growth now appears to be on a sustained upward trajectory, rising for four consecutive quarters. The industry results were released by ISO and the Property Casualty Insurers Association of America (PCI).

"Ironically, premium starved insurers potentially find themselves with their best growth opportunities in five years, but in an underwriting environment that is potentially worse than any experienced in nearly 10 years," said Dr. Robert P. Hartwig, president and chief economist of the Insurance Information Institute (I.I.I.), noting that insurance demand has stabilized after deteriorating during the recession, but he acknowledges continuing underwriting losses.

Read more about the insurance economic outlook: 2011 First Quarter Results (I.I.I. 6/22/11)