Low catastrophe losses, premium growth and increased competition strengthened the property and casualty industry's bottom line in 2013, but those same factors will create downward pressure on pricing in the coming year and create a continued, if uneven, buyer's market, says broker Lockton.
The P&C industry earned an underwriting profit of $2.3 billion in 2013, reversing underwriting losses of nearly $10 billion in 2012, and net written premiums rose to 4.5% in the first half of 2013, a 0.8% increase from the previous year. The combined ratio grew to 97.9% in the second quarter of 2013 from 94.8% in the first quarter, but marked an improvement from 103.2% in 2012.
Property rates in 2013 flattened some due to increased capacity, reduced reinsurance costs, low Florida catastrophe reinsurance costs, and light losses, says Lockton.
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