P&C Insurers Nailed By Cat Losses

The U.S. property and casualty insurance industry was hit hard by catastrophic losses during the first quarter of 2011.

Cat-related losses drove P&C insurers' overall profit down by 29.3 percent, to $9 billion, during Q1 of 2011, compared with the first quarter of 2010. The data was released by A.M. Best Co. on July 6.

A.M. Best reported the drop-off was mostly a result of $3.6 billion in underwriting losses, which reflected an “unusually high level” of catastrophe-related claims. The results were also due to diminished reserve releases.

Insurers’ statutory combined ratio also deteriorated to 102.3  percent during Q1 of 2011. The combined ratio was 99.3 percent during Q1 of 2010.

Best noted that despite the negative news, insurer balance sheets were “generally strong.” Worth noting -- policyholder surplus hot a record of $561.2 billion on March 31, which was up 4.2 percent from 2010.

Net commercial insurance written premiums grew 3.4 percent, to approximately $44 billion in the first quarter, compared with the same period in 2010. The A.M. Best report noted that workers' compensation “seems to be gaining the most traction” in regards to higher commercial lines pricing.