US insurer net income down nearly 70%
Decrease is largely due to cat losses, says Moody's.
November 28, 2011
Moody’s says the nearly 70% drop is largely due to catastrophe losses, but points out that companies collectively were able to report a net profit.
In a bit of good news for the industry, Moody’s says increased exposures and stabilizing rates drove a 7% increase in net premiums written for the 2011 third quarter compared to the 2010 third quarter.
“According to pricing surveys and conference calls, pricing continued to stabilize this quarter with most commercial lines insurers reporting flat or slightly increased rates, depending on the line of business,” says Moody’s
For personal lines, rates continue to increase as they have for the past two years, and modest premium growth is expected to continue as companies seek further rate increases.
Additionally, the 2011 third-quarter showed continued reserve releases by P&C insurers, but at a lower rate than 2010. “Our preliminary aggregate industry reserve analysis suggests US reserves remain modestly redundant across the industry with larger redundancies in personal auto and medical professional liability.”
Standard commercial lines remain slightly redundant, according to the report, but some lines such as workers’ compensation and general liability have deficiencies in recent accident years.
And while 2011 will be remembered for significant catastrophes, it may also be remembered for the industry reaching an inflection point for pricing after multiple years of declines, stated the report.
“The recent stabilization in pricing and relatively benign loss costs should help stem deterioration in future underwriting performance as the premiums are earned,” Moody’s says. “However, P&C insurers face headwinds from weak underwriting margins year-to-date, low investment yields and sluggish economic growth.”
These challenges should help fuel further price increases for US P&C insurers, according to Moody’s.
Print Directory
Order Your Copy of the General Insurance Register Today
The General Insurance Register is the only national sourceguide for all segments of the Canadian P&C industry
Search the Insurance Directory
Creechurch International Underwriters Category: Wholesaler, MGA, or Intermediary
Elliott Special Risks LP Category: Wholesaler, MGA, or Intermediary
Morgex Hole in One Category: Wholesaler, MGA, or Intermediary
Premiere Insurance Underwriting Services Inc Category: Wholesaler, MGA, or Intermediary
Sovereign General Insurance Company Category: Insurer
