Investment gains helped improve overall financial results for U.S. property/casualty insurance companies in 2010, according to a joint release by leading insurance trade groups.
Insurers' net income after taxes rose 21 percent to $34.7 billion in 2010 from $28.7 billion in 2009, and their net worth rose by 8.9 percent to $556.9 billion from $511.4 billion. Net investment gains grew 35 percent to $52.9 billion in 2010 from $39.2 billion in 2009.
Despite gains, insurance companies experienced increased losses
However, net losses on underwriting partially offset the investment gains. Those losses more than tripled to $10.4 billion in 2010 from $3 billion in 2009. The combined ratio--a key measure of losses and other expenses per dollar of premium--worsened to 102.4 percent in last year from 101 percent in 2009, according to ISO and the Property Casualty Insurers Association of America (PCI).
The consolidated estimates account for 96 percent of all insurance business written by private U.S. property/casualty insurance companies.
"Property/casualty insurers' positive results for 2010 show that insurers are well positioned to meet the needs of consumers and business owners as the economy recovers from the Great Recession," PCI President and CEO David Sampson said in a statement. "Nonetheless, weather experts are forecasting an unusually active hurricane season this year, and the tragic events in Japan are a vivid reminder of the need for vigilance in preparing for natural catastrophes. Though major natural disasters seem to be striking our country more frequently, recent growth in policyholders' surplus will help the insurance industry maintain its exemplary track record protecting consumers."