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P/C Profitability Slips in Q1 2016

A 6.3 percent rise in incurred claims and adjustment expenses, especially from catastrophes, led to a decline in profitability in the property/casualty insurance industry in the first quarter of 2016, reports the Insurance Information Institute....
July 20, 2016

A 6.3 percent rise in incurred claims and adjustment expenses, especially from catastrophes, led to a decline in profitability in the property/casualty insurance industry in the first quarter of 2016, reports the Insurance Information Institute (I.I.I.). Profits were $13.3 billion, lower than $18.1 billion last year. Annualized rate of return on average surplus was 7.8 percent, vs. 10.8 percent for the year-ago quarter. The combined ratio rose to 97.5 vs. 95.7 in 2015.

The industry benefited from economic growth in new vehicle sales and construction, but employment and payroll growth “shifted to a headwind from what had previously been a tailwind.” Catastrophe losses for the quarter were $4.9 billion, vs. $3.4 billion in 2015. Full commentary is available online.

 

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