Worst result since records began but insurers remain well capitalised to pay claims, claims the ISO
The property and casualty industry suffered a $1.3bn net loss after taxes for the first-quarter of 2009, according to figures released by the ISO, an insurance data and risk research firm in New Jersey.
‘[P&C] Insurers’ $1.3bn net loss after taxes for the first three months of this year is the worst first-quarter result since records began [in 1986],’ said Michael Murray, ISO’s assistant vice president for financial analysis.
The loss, a result of poor underwriting and deteriorating investment results, constitutes a $9.8bn adverse swing from the industry’s $8.5bn in net income after taxes in first-quarter 2008.
In first-quarter 2009, insurers experienced a $2.5bn net loss on underwriting—more than four times the $0.6bn in losses on underwriting a year earlier. Investment gains also slumped 69.9 % to $3.7bn in the same period.
“Insurers' $1.3bn net loss after taxes for the first three months of this year is the worst first-quarter result since records began.
Michael Murray, ISO's assistant vice president for financial analysis
The combined ratio—a key measure of losses and other underwriting expenses per dollar of premium—worsened to 102.2% in the first three months of this year. In Q1 2008 the combined ration was 99.9%, reported the firm.
Despite this the Q1 financial results show that the P&C industry remains well capitalised to pay claims, according to the firm. It calculated that the total funds available to P&C insurers to cover losses and other contingencies are just under $1.2 trillion.
‘Policyholders can be secure in the knowledge that property/casualty insurers have the financial resources to fulfil their obligations,’ said David Sampson, PCI president and chief executive officer.