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P/C Insurers Profits Jump in First Half as Disaster Losses Fall

Data from ISO and the Property Casualty Insurers Association of America (PCI) reveals that U.S. property/casualty insurers’ net income after taxes increased to $16.4 billion in the first half of 2012, up from $4.8 billion over the same period in 2011...
October 11, 2012

Data from ISO and the Property Casualty Insurers Association of America (PCI) reveals that U.S. property/casualty insurers’ net income after taxes increased to $16.4 billion in the first half of 2012, up from $4.8 billion over the same period in 2011. The insurers’ overall profitability as measured by their annualized rate of return on average policyholders’ surplus increased to 5.9 percent from 1.7 percent. The improvement in underwriting results is chiefly attributable to a decline in net losses and loss adjustment expenses (LLAE) from catastrophes, according to ISO and PCI.

According to ISO’s Property Claim Services (PCS) unit, catastrophes striking the United States in first-half 2012 caused $13.8 billion in direct insured losses (before reinsurance recoveries) for all insurers (including residual market insurers and foreign insurers and reinsurers), down $10.6 billion compared with the $24.4 billion in direct insured losses caused by catastrophes striking the United States in first-half 2011 but one and a half times the $8.9 billion average for first-half direct catastrophe losses during the past ten years.

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