US Property-Casualty Industry Sees Healthy First-Half Profit Growth

The US property and casualty (P&C) insurance industry's net income grew 28 percent during the first half of 2021 compared to the same period last year, according to a new report from A.M. Best.

The rating agency said that data included in the report, First Look: Six-Month 2021 Property/Casualty Financial Results, is derived from companies' 6-month 2021 interim statutory statements that were received as of August 18, 2021. The reports considered represent an estimated 97 percent of the P&C industry's net premiums written, Best said.

The Best report says that a 5.4 percent growth in net earned premiums and a 55.3 percent decline in policyholder dividends offset increases the industry experienced in incurred losses and loss adjustment expenses and underwriting expenses, resulting in the increased underwriting income.

According to the report, the industry's combined ratio improved 0.8 percentage points during the first 6 months of 2021 from the first half of 2020 to 96.9 percent. Catastrophe losses represented 5.8 percentage points of the combined ratio during this year's first half compared with 6.5 percentage points during the same period last year.

Best said that a 6.4 percent increase in US P&C insurers' net investment income along with an additional $1.4 billion in other income, coupled with improved underwriting income, drove a 14.1 percent increase in the sector's operating income. A $10.4 billion increase in realized capital gains contributed to the industry's net income growth growing 57.9 percent during the first half to $38.1 billion.

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