The U.S. property and casualty insurance industry's net income after taxes rose 29.1 percent to a record $30.9 billion in the first half of 2005, from $23.9 billion in first-half 2004, according to Insurance Services Office and the Property Casualty Insurers Association of America. At the same time, the insurers consolidated surplus, or statutory net worth, increased 4.7 percent to $412.5 billion by June 30, from $393.8 billion at the end of 2004.

"Insurers' underwriting results for first-half 2005 were truly remarkable," said John J. Kollar, ISO vice president for consulting and research. "At 92.7 percent, the combined ratio for first-half 2005 was the best first-half combined ratio since the start of quarterly records extending back to 1986."

Increases in net gains on underwriting and net investment income drove the growth in net income and surplus. Net gains on underwriting increased 43.5 percent to $13.2 billion in the first half of 2005, from $9.2 billion in the first half of 2004. During the same period, the combined ratio, a measure of losses and other underwriting expenses per dollar of premium, improved 1.5 percentage points to 92.7 percent, from 94.3 percent. Net investment income grew 32.7 percent to $25.3 billion in the first half of 2005, from $19 billion in the same period of the previous year.