Property-Casualty Insurers' Underwriting Income Falls in First Quarter

The US property-casualty insurance industry's net underwriting income fell 53 percent during the first 3 months of 2021 compared to the same period last year, according to preliminary financial results reviewed by A.M. Best.

A.M. Best's new special report, "First Look: Three-Month 2021 Property/Casualty Financial Results," is based on data from companies' 3-month 2021 interim statutory statements received as of June 1, representing an estimated 99 percent of the total property-casualty industry’s net written premiums, A.M. Best said.

The report said the property-casualty industry's combined ratio deteriorated to 96.4 percent in the first quarter of this year from 95.0 percent during the first quarter of 2020.

Despite 2.3 percent growth in net earned premiums during the first quarter, increases in incurred losses, loss adjustment expenses, and underwriting expenses, as well as a 72 percent increase in policyholder dividends, all contributed to the underwriting income decline, A.M. Best said.

With the property-casualty insurers' net investment income declining slightly, the drop in underwriting income drove a 12.9 percent reduction in pre-tax operating income, the rating agency said. But, as tax expenses were down 18.4 percent and realized capital gains increased $4.1 billion, industry net income increased by 11.4 percent from the same period a year earlier to $20.2 billion, A.M. Best said.

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