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P/C Profits Improve on Lower Losses, Higher Rates

The core operations of property/casualty (P/C) insurers are improving as payouts for damages decline and rates for coverages rise. The Insurance Information Institute (I.I.I.) reports that insurance losses from catastrophes in the U.S. totaled $35 billion in 2012, including $18.75 billion in losses related to Hurricane Sandy, compared with losses of $33.6 billion in 2011...
October 31, 2013

The core operations of property/casualty (P/C) insurers are improving as payouts for damages decline and rates for coverages rise. The Insurance Information Institute (I.I.I.) reports that insurance losses from catastrophes in the U.S. totaled $35 billion in 2012, including $18.75 billion in losses related to Hurricane Sandy, compared with losses of $33.6 billion in 2011.

According to ISO, U.S. insured catastrophe losses for the first half of 2013 totaled $9.7 billion, compared with $14.4 billion for the same period the previous year. Robert Hartwig, president of the I.I.I., said that U.S. insured catastrophe losses for the first half of 2013 were close to “normal,” but “the third quarter of 2013 did not bring any major catastrophes,” with hurricane activity far below expectations. In addition, there has been a decline in workplace accident claims in the United States, despite the addition of “half a million manufacturing jobs over the past three years.”

“We are in the midst of a trend with rates continuing to move up modestly across most types of P/C coverage,” Hartwig said. “That includes homeowners and commercial property insurance which, of course, has been affected by catastrophe losses, but also auto insurance and workers compensation. There is a sustained trend toward moderate rate increases, which have actually been in place for two to three years.”

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