There are plenty of positives, however. Among the eye-catching industry numbers provided by ISO are: the net income, which more than doubled to $13.3 billion from the year-ago quarter; $5.4 billion in statutory net underwriting gain, which reverses the $1.5 billion net underwriting loss one year ago; and the 93.3 combined ratio, down substantially from 99.6 one year ago.

In all, the industry's pre-tax operating income?representing the sum of its gain on underwriting, its net investment income and other miscellaneous income?went up $7 billion to $14.9 billion in the first quarter, from $7.8 billion during the year-ago quarter. Figures are rounded off.

By almost any measure, the industry hasn't seen these kinds of results in quite some time. "I think the 93.3 combined ratio is a very, very good result," commented Michael Murray, assistant vice president for financial analysis at the Jersey City, N.J.-based ISO.

Specifically, he observed that the industry hasn't had a quarterly combined ratio this good, as far back as his ISO quarterly records go, which dates back to the 1986 first quarter. "So, it's the best quarterly combined ratio since at least the 1986 first quarter," Mr. Murray told National Underwriter.

Roger Kenney, PCI assistant vice president for research, called the first-quarter results, "truly remarkable," adding that the industry is enjoying the fruits of its past compounded rate hikes, as well as a decline in loss and loss-adjustment expenses.

Thanks to this strong performance, the industry as a whole was able to add more than $14 billion to its consolidated surplus from the year-end 2003, reaching $361 billion at the end of the 2004 first quarter.

John Kollar, ISO vice president for consulting and research, said on balance the p-c industry's first-quarter results provide "ample reasons to congratulate insurers for the progress they've made."

He praised their recovery, from more than a decade of poor underwriting, $35.7 billion in capital losses between 2000 and 2002, and the financial effects of the terror attack on Sept. 11, 2001.

But some analysts warn that just below some of the outstanding quarterly results, there are also factors that suggest the industry's performances are actually not as sterling as they first appear and that, furthermore, their numbers also hint at potential troubles ahead for the sector.

"The biggest surprise for me," commented ISO's Mr. Murray, "was that the net written premium growth was only 4.5 percent versus the year-ago levels, from 12.7 percent in 2003 first quarter. The premium growth was weaker than might have been expected."

This is bad news, he suggested, in the sense that it suggests the hard market which has been fueling growth in premiums up to this point has perhaps largely run out of steam, or is at least taking a break.

Mr. Murray also raised an issue of the decline in non-catastrophe losses. Incurred losses in insurers' financial results reflect insurers' "best estimates of the losses they ultimately expect to pay, or at least that's what they are supposed to reflect," he said.

He is not in a position to argue that insurers are underestimating; Mr. Murray said commenting, "What we do know is that the economy is certainly growing and that inflation continues to impact insured losses. Absent all other things, the expectation would be that the losses would grow in line with growth in the economy and the inflation."

ISO and PCI also said there is the possibility of reserve strengthening in the later quarters of 2004 that could crimp the industry's effort to continue its underwriting profitability.