Despite the ravages of four hurricanes in Florida last year, the nation's property and casualty insurers reported profits of $41.3 billion in 2004, representing a 28-percent increase over the $32.3 billion earned in 2003, according to Weiss Ratings.
“Property and casualty insurers continue to post impressive results,” said Melissa Gannon, vice president of Weiss. “The ability to withstand such a horrific hurricane season is an indicator of the industry's long-term financial strength.”
Contributing to the industry's healthy performance, underwriting profits reached a record high, surging to $6.4 billion as of Dec. 31, 2004, compared to a $2.9-billion loss the previous year. The underwriting gain was primarily due to an increase in earned premiums, which jumped from $387.7 billion in 2003 to $414.3 billion in 2004.
As a result of improved underwriting, the industry's loss ratio, which represents the percentage of losses paid out compared to earned premium collected, declined further. The overall loss ratio, which does not include loss adjustment expenses or underwriting expenses, fell to 59.8 percent for 2004 from 61.7 percent for 2003. The line of business posting the highest loss ratios for 2004 was product liability at 79.9 points, a 5.76-point increase from last year.
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