Private U.S. property/casualty insurers' net income after taxes rose from $13.9 billion in the first quarter of 2014 to $18.2 billion in the first quarter of 2015. Measured by their rate of return on average policy holders' surplus, insurers' overall profitability grew from 8.4% to 10.8%, according to ISO, a Verisk Analytics business, and the Property Casualty Insurers Association of America (PCI).
In the first quarter of 2015, insurers' combined ratio improved to 95.7%, compared to 97.1% in first quarter of 2014, and their net underwriting gains increased from $2.4 billion to $4.1 billion. Net written premium growth remained at a steady 3.7% for the first quarters of 2014 and 2015. In the first quarter of 2015, net investment income rose to $11.7 billion up from the previous $11.2 billion a year.
Need to focus on underwriting
The first quarter of 2015 saw net investment gains of $16.4 billion, after capital gains jumped from $2.9 billion to $4.7 billion, increasing net investment income from $11.2 billion in the first quarter of 2014 to $11.7 billion in the first quarter of 2015. Since the start of ISO's quarterly records in 1986, this marks the highest first quarter capital gains and net investment gains realized.
“The industry needs to focus on underwriting, as investment gains may be unpredictable and investment yields will likely remain suppressed for a while,” said Beth Fitzgerald, president of ISO Insurance Programs and Analytic Services. “It's those insurers that stay current on emerging issues and make use of predictive analytics that will be the best prepared to weather potential storms that the markets, social or technological developments, or nature might send their way.”
Mild catastrophic losses
Net written premiums rose by 3.7% to $125.9 billion in the first quarter 2015 from $121.4 billion in the first quarter of 2014. The unchanged 3.7% net written premium growth rate from first-quarter 2014 to first quarter of 2015 is below the 4.3% average for the last 12 quarters and the 4.1% growth rate for full-year 2014. In the first quarter of 2015, the growth rate in net earned premiums fell to 3.7% from 4.2% in first-quarter 2014 and 4.3% for full-year 2014.
“Property/casualty insurers had a strong first quarter, underscoring strong capital levels, competitive markets, underwriting disciplines, and business competencies,” said Robert Gordon, PCI's senior vice president for policy development and research. “These results, partially attributable to mild catastrophic losses, have insurers well positioned to continue to provide the necessary financial security for their policyholders as we move farther into yet another uncertain hurricane season.”
View full report Property/Casualty Insurance Results: First-Quarter 2015.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Trudy Knockless
Trudy Knockless is a reporter on ALM Media's Business of Law desk. She has a background serving legal and insurance publications. Contact her at [email protected] or on LinkedIn at Trudy Knockless.
