The U.S. property/casualty (P/C) industry improved its net underwriting income in 2019 to $4.1 billion, according to data from AM Best.
The rating agency found that net underwriting income was up $4.9 billion compared with the loss of $800 million reported in 2018.
It attributed the increase to a 4.7% growth in net premiums earned, which offset higher incurred losses and loss adjustment expenses, as well as underwriting expenses and policyholder dividends.
The P&C industry’s 2019 combined ratio also improved in 2019, moving to 98.8%, compared to 99.3% in the previous year.
Analysts estimate that catastrophe losses accounted for 4.2 points on the 2019 combined ratio, down from an estimated 5.9 points in 2018.
With net investment and other income remaining flat with the prior year, the improvement in underwriting income in 2019 was the main driver in pre-tax operating income increasing by 10.0% to $61.8 billion.
A 7.3% decrease in realized capital gains and a 17.2% increase in income taxes resulted in 2019 industry net income increasing by 6.1% to $63.2 billion.
AM Best’s data was derived from companies’ 2019 annual statutory statements received as of March 4, 2019, representing an estimated 97% of the total P/C industry’s net premiums written.
