The results were published in the latest Best’s Special Report
For the first time in four years, per the latest issue of Best’s Special Report, the U.S. Property & Casualty insurance industry suffered an underwriting loss.
In the special report entitled “A.M. Best First Look – 4Qtr 2016 U.S. Property/Casualty Financial Results,” the rating agency says a review of financials shows an estimated $5.2 billion net underwriting loss for the industry as of the end of 2016. This loss results from an 18.3% decline in net income compared to 2015 results.
This loss marks the first underwriting loss for the property/casualty industry since 2012. However, the 2016 results also marked the third consecutive year of deteriorating underwriting results for the property/casualty industry.
More details from the report
A.M. Best financial review compiled its findings from U.S. insurance company’s statutory statements. As of March 9, 2017, the filing date required for the statutory statements, the rating agency could make its projections based on an estimated 94% of the total net premiums written in the property/casualty industry during 2016.
As for additional findings, A.M. Best noted:
- The industry’s reported combined ratio deteriorated 2.9 points from the previous year to 100.7, marking the worst year-to-year comparison in the last four years.
- Hurricane Matthew boosted estimated U.S. catastrophe losses in 2016 by 43.2% to $24.9 billion, the industry’s highest catastrophe loss total since 2012, when Hurricane Sandy made landfall.
- Despite the net income decline to $44.4 billion from $54.3 billion in the previous year, policyholders’ surplus reached a record $667.5 billion at year-end 2016, driven by: Significant increases in unrealized capital gains at two Berkshire Hathaway companies and State Farm; a decrease in net other-surplus losses; and a reduction in stockholder dividends.
