P-C Industry Net Income Down 7.3 Percent
NU Online News Service, June 26, 3:11 p.m. EST?The U.S. property-casualty industry's net income after taxes dropped 7.3 percent to $5.1 billion in first-quarter 2002 from $5.5 billion in first-quarter 2001, according to consolidated industry results released today.
The figures are consolidated estimates for the entire industry based on the reports of insurers that account for 96 percent of the country's property-casualty insurance business. The results were compiled by the Insurance Services Office, Inc. in Jersey City, N.J., and the National Association of Independent Insurers in Des Plaines, Ill.
"The industry's bottom line deteriorated as both net investment income and realized capital gains declined," the groups said in a release.
However, unlike investment results, underwriting results improved. The industry's net loss on underwriting declined 38 percent to $3.8 billion in first-quarter 2002 from $6.1 billion in first-quarter 2001.
The combined ratio improved 3.8 points to 102.3 in first-quarter 2002 from 106.1 in the corresponding quarter of 2001.
However, the $2.3 billion improvement in net underwriting results was not enough to offset deterioration in investment results. The industry's pre-tax net investment gain, which combines net investment income (primarily dividends earned from stocks and interest on bonds) and realized capital gains, fell $3.3 billion, or 26.4 percent, to $9.3 billion in first-quarter 2002 from $12.6 billion in first-quarter 2001.
Net investment income dropped $0.5 billion, or 5.5 percent, to $8.9 billion from $9.5 billion. Realized capital gains dropped $2.8 billion, or 88.8 percent, to $0.4 billion in first-quarter 2002 from $3.2 billion in first-quarter 2001.
(For the full table of results, plus industry reaction and analysis, see National Underwriter's July 1 edition, page 5.)
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