ISO/PCI analyze 2013 p/c insurers’ performance

April 22, 2014

The Insurance Services Office Inc. and the Property Casualty Insurers Association of America published a press release on private U.S. property/casualty insurers’ performance in 2013. Their net income after taxes grew to $63.8 billion in 2013 from $35.1 billion in 2012, with insurers’ overall profitability as measured by their rate of return on average policyholders’ surplus climbing to 10.3 percent from 6.1 percent. At 10.3 percent, insurers’ overall rate of return had risen to its highest level since the 12.4 percent for 2007. Insurers’ pretax operating income–the sum of net gains or losses on underwriting, net investment income, and miscellaneous other income–rose to $64.3 billion in 2013 from $35.0 billion in 2012. The combined ratio–a key measure of losses and other underwriting expenses per dollar of premium–improved to 96.1 percent for 2013 from 102.9 percent for 2012. The swing to net gains on underwriting is attributable to premium growth and a drop in net losses and loss adjustment expenses, but were partially offset by increases in underwriting expenses and dividends to policyholders.

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