Private U.S. property/casualty insurers saw their net income after taxes more than double to $34 billion in first-half 2018 from $15.5 billion in first-half 2017, with the help of lower catastrophe losses, growing premiums, and an increase in investment income, according to ISO, a Verisk business, and the Property Casualty Insurers Association of America (PCI).
Losses and loss adjustment expenses from catastrophes declined to $14.6 billion for first-half 2018 from $18 billion a year earlier. Net written premiums grew 13.3 percent in first-half 2018 from 4.1 percent a year earlier, affected in part by the growth in the economy, rising auto premiums, and changes that multiple insurers made to their reinsurance arrangements. Overall, insurers enjoyed a $6 billion net underwriting gain, rebounding from a $4.6 billion net underwriting loss for first-half 2017.
Net investment income jumped 14.6 percent to $26.8 billion from $23.4 billion, with the increase mostly due to large dividends from insurers’ subsidiaries that don’t operate in property/casualty insurance.
Insurers’ net income after taxes rose to $16.9 billion in second-quarter 2018 from $7.5 billion in second-quarter 2017, and their combined ratio improved to 97.7 percent in second-quarter 2018 from 101.9 percent a year earlier.
Their annualized rate of return on average surplus more than doubled to 9 percent in second-quarter 2018 from 4.2 percent a year earlier.
Net written premiums rose 10.9 percent in second-quarter 2018, compared with 4.2 percent in second-quarter 2017.