OLDWICK, N.J.--(BUSINESS WIRE)--The U.S. property/casualty (P/C) industry’s net income more than doubled through the first three quarters of 2012, to $31.2 billion, from $12.3 billion at Sept. 30, 2011, driven by improved underwriting results, according to an A.M. Best Co. special report. While Superstorm Sandy will adversely affect income in the fourth quarter of 2012 and for the full year, the P/C industry’s well-capitalized position should result in Sandy having only a modest impact next quarter.
The report, titled, “U.S. P/C Net Income Improves in 3rd Qtr; Sandy’s Impact Yet to be Realized,” also found that the P/C industry’s combined ratio has improved to nearly break-even, at 100.1, down 8.4 points from the same period in 2011. Nine-month results detailed in the report also include:
- While a substantial reduced underwriting loss — to $4.4 billion from more than $30 billion through the first three quarters of 2011 — significantly increased net income and drove a 2.1% increase in policyholders’ surplus year to date, net investment income continued to decline gradually, down 1.3% year over year.
- Net premiums written (NPW) year to date for the total P/C industry increased 4.4%. Additionally, NPW for commercial lines outpaced growth in personal lines in the third quarter, led by strong growth in direct premiums written in the workers’ compensation, commercial multi-peril and ocean and inland marine lines of business.
- Catastrophe losses moderated significantly through the third quarter of 2012, with 5.4 points of the P/C industry’s combined ratio generated by catastrophe losses, compared with 11.9 points in 2011.
- Superstorm Sandy is not expected to create a substantial capital challenge to the P/C industry, and even after a record catastrophe year in 2011, the overall position of the P/C insurance industry’s balance sheet is strong. A.M. Best anticipates that the industry will absorb these losses without significant impact to its overall financial strength.
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