NU Online News Service, March 11, 1:20 p.m. EST

U.S. insurers regained lost ground in 2009 with the property and casualty sector's net income nearly tripling, to $35 billion, according to the Highline Data Performance Monitor.

The Performance Monitor, which aggregates key statutory financial data reported by individual insurance companies every quarter, also found the life insurance industry saw net gain from operations more than triple to a five-year high of $76.2 billion, up from last year's five-year low of $17.6 billion.

The steep rise in net gain from operations was due to a greater decrease in premiums written, 16 percent, than in benefits paid, 14 percent, over the course of the year. This also drove life insurers' return on equity to a five-year high of 15.2 percent, Monitor reported.

Highline said the absence of major catastrophes during the year gave property and casualty insurers their biggest decline in net losses incurred, 11.3 percent in the past ten years.

These findings demonstrate that the industry as a whole has regained a considerable amount of ground lost during the economic crisis, but not all of it, said Highline.

Insurers, according to the Monitor, entered 2010 in better shape than they did 2009, but were still behind where they were in recent years on many key measures.

Despite their impressive gains in 2009, the $35 billion in net income for property and casualty insurers, up 274.3 percent, was still less than half that seen in 2006, $73.2 billion.

The changes in income cited by Highline is based on comparisons of unconsolidated income for 2,699 individual insurers--basically the sums of net income for 2006, 2008 and 2009 for the individual insurance companies in the Highline database. These figures give an early indication of how overall industry figures changed last year.

The $35.0 billion net income sum is only a proxy for aggregate net income that will ultimately be reported for the industry. The true dollar figure for industry aggregate net income will take into account intercompany transactions and investments in affiliates when it is ultimately reported by Highline Data in June.

The combined ratio for the property and casualty industry, while improved to 101.3 percent from last year's high of 105.1 percent, is still above the break even point, Highline noted.

Combined ratio measures the profitability of a company's daily operations by combining the loss and expense ratios. Because the ratio was above 100 percent, the industry as a whole sustained an underwriting loss in 2009.

Driven in part by the continued pressure on interest rates in equity markets, net investment income for life insurers hit a five-year low of $154.5 billion at year's end, the Monitor reported. Net yield likewise hit a five-year low of 5.1 percent.

Laurie Dallaire, vice president and director of Highline Data in Cambridge, Mass. said, "Being the first to deliver annual statement data to the industry once again, we at Highline Data continue to give our customers an edge in the marketplace."

She added that "Our findings suggest that property and casualty companies will continue to strive to contain expenses and further reduce their combined ratios while life companies will continue to rebuild capital and improve investment yields this year."

On March 1, Highline Data was the first to publish comprehensive statutory financial statements from individual insurance companies.

Financial statements for all 3,313 individual companies that have filed are available online via Insurance Analyst PRO. Insurance Analyst PRO provides insurance industry statutory and GAAP financial analysis. The analysis data is derived from the annual statutory financial statements filed with the National Association of Insurance Commissioners (NAIC) by individual companies.

Highline Data is a unit of Summit Business Media, parent company of National Underwriter.

P&C Insurance Industry % Change

Net Income 274.3%

Total Assets 3.6%

Policyholder Surplus 11.7%

Net Premiums Earned -3.8%

Net Losses Incurred -11.3%

Loss Adjustment Expense 1.5%

Net Premiums Written -4.0%

2009 Ratios

Loss Ratio 73.0%

Expense Ratio 28.2%

Combined Ratio 101.3%

Action Level RBC Ratio 638%