H Best Report: U.S. P / C Industry Profits Plunge; insurers

 

Friday, Mar 06,2009, 6:39:13 PM   Click:

H Best Report: U.S. P / C Industry Profits Plunge; insurers ready for Turnaround
Business Editors

Oldwick, NJ - (BUSINESS WIRE) - February 9, 2009 - Deterioration of the underwriting and investment results of U.S. property / casualty industry in net income by almost 80% to 14.0 billion in 2008.


The decline in technical results and weak investment markets have the property / casualty insurers at a critical point where the future profitability depends on strict adherence to underwriting discipline and funding, even at the expense of market share.
After declining in 2007, net premiums are expected to show another decline in 2008, competition on almost all lines of flight and the premium for non-US, as well as macroeconomic factors, including the current recession the credit crisis, the correction of housing, rising unemployment andhigh energy prices. This is the first back-to-back premium decline since 1932-33.
Two consecutive years of underwriting profits are expected to give way to a loss of $ 21.5 billion for 2008, thanks to a continued soft market, size and frequent weather-related losses and the impact of losses in the financial and mortgage sectors.
H Best Co. estimates the industry recognize nearly $ 11.0 billion of favorable loss reserve development in 2008, even higher than the $ 9.0 billion recorded in 2007-which still has the erosion of the overall loss of industry reserves.
The uncertainty of investment markets continue to impact policy decisions, including most of the prices and participation in mergers and acquisitions (M & A). As budgets begin to decline, the sensitive window of M & As will be closing in May.
Although policyholders surplus has decreased by approximately 10% in 2008, the surplus of capital has absorbed much of the decrease, and the entire industry remains sufficiently capitalized to meet the current challenges in the underwriting and financial markets.

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Founded in 1899, PM Best Company is a full-service credit rating organization dedicated to serving the financial and service industries, including insurance companies, banks, hospitals and suppliers of system health care. For more information, visit www.ambest.com.

H Best Company
Analysts
Edward Keane, 908-439-2200, ext. 5291
edward.keane @ ambest.com
Michelle Baurkot, 908-439-2200, ext. 5507
michelle.baurkot @ ambest.com
or
Public Relations
Jim Peavy, 908-439-2200, ext. 5644
james.peavy @ ambest.com
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow @ ambest.com

State Keywords: New Jersey
Industry Keywords: professional services, insurance
Source: h Best Company

Copyright © 2009 Business Wire Business Editors OLDWICK, NJ - - February 9, 2009 - Deterioration of the underwriting and investment results have led the United States