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P/C Insurers Report 66 Percent Increase in Net Income in 2018

Increase driven by growth in premiums and decline in catastrophe losses

JERSEY CITY, N.J., May 6, 2019 — Private U.S. property/casualty insurers saw their net income after taxes rise to $60 billion in 2018 from $36.1 billion in 2017—a 66.3 percent increase—helped by double-digit premium growth and a significant decline in catastrophe losses, according to Verisk (Nasdaq:VRSK), a leading data analytics provider, and the American Property Casualty Insurance Association (APCIA).

Net written premiums grew 10.8 percent to $612.6 billion in 2018 due to organic premium growth and changes that multiple insurers made to their reinsurance arrangements. Losses and loss adjustment expenses (LLAE) from catastrophes declined to $43.3 billion in 2018 from $49.5 billion a year earlier.

Insurers’ net underwriting losses improved to $0.1 billion in 2018 from $23.3 billion a year earlier, and their combined ratio improved to 99.2 percent for 2018 from 103.7 percent for 2017. Net investment income increased 13.2 percent to $55.3 billion in 2018 from $48.9 billion a year earlier, with the increase mostly due to large dividends from insurers’ subsidiaries that don’t operate in property/casualty insurance.

“U.S. property/casualty insurers had a marginally profitable year in 2018, roughly breaking even on underwriting and slightly increasing investment returns,” said Robert Gordon, senior vice president for policy, research and international, at APCIA. However, industry surplus declined moderately, primarily reflecting volatile short-term market valuation of investments, with fourth-quarter 2018 unrealized capital losses the worst on record. Net earned premiums in 2018 grew twice as fast as direct written premium relative to 2017, reflecting continuing adjustments in reinsurance agreements. While 2018 U.S. catastrophe losses declined from 2017, insurers remain guarded because global insured catastrophe losses continued at a record pace and the fourth-quarter U.S. combined ratio spiked to 104.6 percent.”

“The insurance industry continued to perform well in 2018, helped by double-digit growth in premiums,” said Neil Spector, president of ISO, a Verisk business. “Results were also helped by a decline in catastrophe losses. Catastrophe losses in 2018 were not low by any measure, due to two hurricanes and California wildfires, but those losses still paled in comparison to the losses caused by Hurricanes Harvey, Irma, and Maria in 2017. Fortunately, new technology—fueled by aerial imagery and property analytics—is helping improve the claims experience for policyholders, while enabling insurers to reduce costs and make underwriting and claim decisions with increased speed and precision.”

Fourth-Quarter Results

Insurers’ net income after taxes fell to $10.5 billion in fourth-quarter 2018 from $13.7 billion in fourth-quarter 2017, and their combined ratio deteriorated to 104.6 percent in fourth-quarter 2018 from 102.5 percent a year earlier.

While the catastrophe losses for the entire year 2018 have declined compared with the massive catastrophe losses of 2017, last year set a new record for fourth-quarter direct catastrophe losses, due to the California wildfires and Hurricane Michael.

Insurers’ annualized rate of return on average surplus fell to 5.5 percent in fourth-quarter 2018 from 7.5 percent a year earlier.

Net written premiums rose 9 percent in fourth-quarter 2018, compared with 6.1 percent in 2017.

View the full report from Verisk and APCIA here.

Net Income After Taxes

2018: By The Numbers

About Verisk 
Verisk (Nasdaq:VRSK) provides predictive analytics and decision-support solutions to customers in the insurance, energy and specialized markets, and financial services industries. More than 70 percent of the FORTUNE 100 relies on the company’s advanced technologies to manage risks, make better decisions and improve operating efficiency. The company’s analytic solutions address insurance underwriting and claims, fraud, regulatory compliance, natural resources, catastrophes, economic forecasting, geopolitical risks, as well as environmental, social, and governance (ESG) matters. Celebrating its 50th anniversary, the company continues to make the world better, safer and stronger, and fosters an inclusive and diverse culture where all team members feel they belong. With more than 100 offices in nearly 35 countries, Verisk consistently earns certification by Great Place to Work. For more:, LinkedIn, Twitter, Facebook, and YouTube.

About APCI
Representing nearly 60 percent of the U.S. property casualty insurance industry, the American Property Casualty Insurance Association (APCI) promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. APCI represents the broadest cross section of home, auto, and business insurers of any national trade association. APCI members represent all sizes, structures, and regions, which protect families, communities, and businesses in the U.S. and across the globe. For more information, visit

Brett Garrison
Edelman (for Verisk)

Jeffrey Brewer for APCIA

Michael Barry for I.I.I.

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