The results were blamed on the combination of first-half catastrophe losses and “broadly inadequate pricing.”

In Alirt's analysis of the 50 largest U.S. insurers, excluding reinsurers, the firm says the combined ratio jumped to 109.6 for the first six months of this year from 102.6 for the year 2010.

In its universe of 49 companies it analyzes, KBW says excluding catastrophe losses and reserve development, the group reported an accident year combined ratio of 97.3 for the first six months of 2011, compared to 93.9 for the same period in 2010.

“The P&C industry continues to struggle with deteriorating fundamentals, as accident-year loss ratios move higher, reflecting pricing inadequacy,” says KBW.

The results are beginning to take a toll on insurers, the analysts say.

“Reinsurers and regional underwriters suffered disproportionately from the impact of catastrophe losses and reported the worst underwriting results and weakest overall profitability,” says Fitch.

Fitch says return on average equity for its group fell to 3.1 percent for the six months of 2011, compared to 6.9 percent for the prior year. Fitch says for most companies that number should be around 10–12 percent.

KBW says the insurance group it monitors reported a 1.6 percent return on equity for the period, down from 9.8 percent for the first half of 2010.

The results point to an increase in premiums, but when remains a question.

“Fitch anticipates that property insurance and reinsurance markets affected by recent catastrophe events will experience significant price increases in response to recent losses,” the rating agency says.

While other commercial markets are showing increased signs of “price stability,” a return to a broad P&C hard market is “unlikely given current market capital levels and competitive dynamics,” says Fitch.

KBW says there are pockets of “pricing strength,” but the industry “is teetering and waiting for that one 'event' to push the industry into action.”

At least one positive is the growth in premiums written.

Alirt says the numbers have grown from their low of -4.1 percent in 2008 to 2.3 percent at the end of the first half of 2011.

KBW noted that premium levels rose four percent on a year-over-year basis, “reflecting a stabilizing economy.” However, premium growth is expected to remain “muted” from the combination of weak economy, high unemployment, and lack of widespread rate hardening.