Fitch Ratings looked at financial statistics for the first half of 2016 from 44 insurers and reinsurers. The ratings firm said operating income for P&C insurers in North America was cut in half the first half of 2016. Investment income decline and a rise in catastrophe losses are the reason.
Earnings — Fitch spokesman Christopher Grimes said — on average fell 10.8% and ended up at $21.6 billion. “Maintaining or improving underwriting performance will be the key to generating adequate returns on capital going forward.”
The combined ratio rose to 95.7 which is about 1.5 points higher than a year ago. Catastrophe losses are the big contributor there. Fitch said it added 5% to the overall combined ratio.
Investment income fell by 6.8% on average — up from last year’s 3.4% — and totaled $21.9 billion. That’s bad news but there is some good news. Fitch said investment games are about the same as 2015 at $2.4 billion.
Source links: Carrier Management, Insurance Journal