ISO and the Property Casualty Insurers Association of America (PCI) said insurers had a bad year in 2016. Net underwriting losses hit $4.7 billion. Unusually higher catastrophe losses are one reason why.
Direct insured property losses were $21.6 billion in 2016 compared to $15.2 billion in 2015. That figure is also a couple of billion above the $19.2 billion average direct catastrophe losses in the last decade.
The new report highlights why the $4.7 billion is so dramatic and compared the $4.7 billion to a gain of $8.9 billion in 2015.
Private U.S. property/casualty insurers lost big in 2016, reporting a $4.7 billion net underwriting loss driven, in part, by significantly higher catastrophe-related property losses, according to ISO and the Property Casualty Insurers Association of America.
The results stand in sharp contrast to the $8.9 billion net underwriting gain insurers reported for 2015. That was also a 25% cut in after-tax net income. That figure is $42.6 billion down from $56.8 billion.
The combined ratio fell to 100.7 in 2016 from the 97.8 figure of 2015.
ISO President Beth Fitzgerald put it in perspective. “Catastrophe losses continued to hurt insurer performance in 2016. There were 43 catastrophe events in 2016, the highest number of such events since 1980,” she said.
Other conclusions from the report:
• Net investment income for 2016 is $46.3 billion and compares to $47.2 billion in 2015.
• Commercial lines direct premiums in 2016 rose 3.1% to $258.6 billion.
• The growth is from small commercial and middle market risks including specialty trade contractors, building construction, real estate and auto dealers.
• Industry surplus in 2016 is $700.9 billion industry surplus compared to $674.2 billion at the end of 2015.
Source link: Insurance Journal