A new Fitch Ratings report has highlighted a 50% fall in first quarter net income within the US property/casualty space compared to the prior year quarter.
Combined ratio, meanwhile, deteriorated from 95% to 96.4%, with catastrophe losses accounting for an estimated 6.9 points.
This figure is up from 3.3 points seen in the prior year quarter.
Despite 2.3% growth in net earned premiums in the quarter, increases in incurred losses, loss adjustment expenses (LAE) and underwriting expenses, as well as a sharp 72% rise in policyholder dividends, drove the underwriting income decline.
With net investment declining slightly, Fitch says the drop in underwriting income drove a 12.9% reduction in pre-tax operating income.
As tax expenses were down 18.4% and realized capital gains were up $4.1 billion, industry net income increased by 11.4% from the same prior-year period to $20.2 billion.
Fitch’s data was derived from companies’ three-month 2021 interim statutory statements that were received as of June 1, representing an estimated 99% of the total P/C industry’s net premiums written.
