U.S. property/casualty insurers’ net income following taxes rose to $34.7 billion in 2010 from $28.7 billion the entire year prior to, with insurers’ rate of return normally policyholders’ surplus growing to 6.5 percent from 5.9 percent.
Policyholders’ surplus rose $45.5 billion, or 8.9 percent, to $556.9 billion at Dec. 31, 2010, from $511.4 billion for 2009.
Contributing to the increases within the insurance industry’s net gain, overall rate of return, and surplus, insurers net investment gains grew $13.8 billion to $52.9 billion this year from $39.2 billion in 2009.
Partially offsetting the growth in investment gains, insurers’ net losses on underwriting grew to $10.four billion this year from $3 billion last year. The combined ratio (losses along with other underwriting expenses per dollar of premium) deteriorated to 102.four percent this year from 101 percent last year, based on business groups, ISO and also the Property Casualty Insurers Association of America (PCI).
The figures are consolidated estimates for all insurers writing a minimum of 96 percent of company compiled by private U.S. property/casualty insurers.
The trade groups stated the outcomes in 2010 show that insurers are “well positioned” to satisfy the requirements of customers and company owners because the economy recovers in the recession. Combining insurers’ $556.9 billion in policyholders’ surplus as of December 31, 2010, their $557.7 billion in loss and loss adjustment expense reserves, as well as their $199 billion in unearned premium reserves, insurers had $1.three trillion to pay claims and meet other contingencies, stated David Sampson, PCI president and CEO.
Michael R. Murray, ISO assistant vice president for monetary analysis, stated insurers “continue to manage substantial headwinds in their core company - underwriting - with costs however to firm in numerous commercial insurance markets regardless of rising loss and loss adjustment expenses.”
Murray stated that within the near term, economic growth could improve the frequency of claims and and because the economy inches closer to full employment, inflation within the harshness of claims might accelerate.
“But economic growth might also spur increases in demand for insurance that absorb excess capacity quicker than investment gains produce it. If it does, insurers can look forward to a finish towards the soft marketplace, accelerating premium growth, and improvement in underwriting outcomes,” Murray stated.
Rate of Return
The industry’s 6.five percent rate of return in 2010 was the web result of negative rates of return for mortgage and monetary guaranty insurers and single-digit rates of return for other insurers. ISO estimates that mortgage and monetary guaranty insurers’ rate of return normally surplus in 2010 was negative 36.6 percent, up from negative 51.7 percent for 2009. Excluding mortgage and monetary guaranty insurers, the industry’s rate of return edged as much as 7.five percent in 2010 from 7.four percent for 2009.
“Despite the increases in insurers’ net gain and overall rate of return this year, insurers’ outcomes remained subpar,” stated Sampson. He stated insurers’ 6.5 percent rate of return in 2010 was 0.four percentage points much less than their 6.9 percent average rate of return for the past Ten years and 2.6 percentage points much less than their 9.1 % average rate of return for the 52 years from 1959 to 2010. Moreover, insurers’ rate of return remained far below benchmarks such as the 13.9 percent long-term average rate of return for the Fortune 500.
Underwriting Outcomes
Net losses on underwriting grew $7.4 billion to $10.four billion in 2010 as earned premiums fell and loss and loss adjustment expenses (LLAE), underwriting expenses, and dividends to policyholders all rose.
Net written premiums rose $3.7 billion, or 0.9 percent, to $422.1 billion for 2010 from $418.four billion for 2009. But net earned premiums fell $1.8 billion, or 0.four percent, to $420.5 billion from $422.3 billion as a result of prior declines in written premiums.
Net LLAE (following reinsurance recoveries) rose $2.8 billion, or 0.9 percent, to $309.1 billion in 2010 from $306.3 billion last year, largely as a result of greater catastrophe LLAE.
Other underwriting expenses - primarily acquisition expenses; expenses linked with underwriting, pricing, and servicing insurance policies; and premium taxes - rose $2.5 billion, or 2.2 percent, to $119.6 billion this year from $117 billion last year, whilst dividends to policyholders increased $0.3 billion, or 14.4 percent, to $2.3 billion from $2 billion.
ISO estimates that private insurers’ net LLAE from catastrophes striking the United States rose $2.7 billion to $14.three billion for 2010 from $11.6 billion for 2009, with the $11.6 billion for 2009 such as some late-emerging losses from Hurricane Ike in 2008.
Based on ISO’s Property Claim Services (PCS) unit, catastrophes striking the Usa in 2010 caused $13.8 billion in direct insured losses (prior to reinsurance recoveries) for those insurers (such as residual-market insurers and foreign insurers) Up $3.2 billion from $10.6 billion last year but $6.five billion much less than the $20.2 billion average for that Ten years ending 2010.
Noncatastrophe net LLAE rose $0.1 billion to $294.8 billion in 2010 from $294.7 billion for 2009.
Total net LLAE for both 2010 and 2009 was decreased by downward revisions towards the estimated ultimate price of claims incurred in prior years and consequent releases of LLAE reserves. Such downward revisions and releases dropped to $9.7 billion this year from $11 billion in 2009. Excluding those amounts, net LLAE rose $1.5 billion, or 0.5 percent, to $318.8 billion last year from $317.3 billion last year.
“The 0.9 percent improve as a whole business net written premiums in 2010 is definitely welcome news following 3 consecutive years of declines. Moreover - and possibly sending an indication about the nature of issues to come - year-to-year comparisons improved for every from the 3 main subsectors of the business tracked by ISO,” stated Murray.
Net written premium growth for insurers writing predominantly individual lines accelerated to positive three.three percent in 2010 from negative 0.five percent in 2009, with premium growth for insurers writing much more balanced books of company growing to positive 2.1 percent from negative three.6 percent. Premium growth for insurers writing predominantly commercial lines rose to negative 2.7 percent from negative 7.five percent.
Excluding mortgage and monetary guaranty insurers, commercial lines insurers’ net written premiums dropped just 2.2 percent last year, following falling 6.five percent last year.
“The deterioration in underwriting profitability as measured through the combined ratio is really a specific trigger for concern simply because today’s low investment yields together with the long-term decline in investment leverage that helped insulate insurers in the ravages from the monetary crisis and also the Fantastic Recession mean insurers require much better underwriting outcomes just to be as profitable because they as soon as had been,” stated Sampson.
Based on PCI, in 1986, insurers achieved a 15.1 % rate of return having a combined ratio of 108.1 %. Although insurers’ combined ratio for 2010 was five.7 percentage points much better, their rate of return was just 6.five percent - 8.6 percentage points less than in 1986 - due to declines in investment yields and investment leverage.
Investment Outcomes
Insurers’ net investment income - primarily dividends from stocks and interest on bonds - increased by $0.2 billion to $47.2 billion this year from $47.1 billion in 2009. The $5.7 billion in realized capital gains on investments in 2010 constituted a $13.6 billion swing from insurers’ $7.9 billion in realized capital losses on investments last year. Combining net investment income and realized capital gains, overall net investment gains rose 35.2 percent to $52.9 billion this year from $39.2 billion last year.
Combining the $5.7 billion in realized capital gains this year with $15.6 billion in unrealized capital gains throughout the time, insurers posted $21.three billion in overall capital gains this year - a $6.1 billion improve in contrast to insurers’ $15.2 billion in overall capital gains on investments in 2009.
“Unfortunately, insurers’ net investment income in 2010 was even much more anemic than it appears. The $0.2 billion improve reflects $1.three billion that 1 insurer received from the newly acquired affiliate outside the insurance space,” stated Sampson. “Absent the investment income generated by that acquisition and also the new funds raised to invest in it, insurers’ investment income would have declined in 2010. Prospectively, there's still some risk that insurers’ investment income will decline as they replace maturing bonds paying fairly high yields with new bonds paying lower yields.”
Insurers’ overall capital gains for 2010 reflect developments in monetary markets. The New York Stock Exchange composite rose 10.8 percent this past year, using the Dow Jones Industrial Average, the S&P 500, and also the NASDAQ composite climbing 11 percent, 12.8 percent, and 16.9 percent, respectively, based on Murray. He stated insurers’ investment outcomes also benefited from a decline in realized capital losses on impaired investments, which dropped to $5.9 billion this year from $16.1 billion in 2009.
Pretax Operating Income
Pretax operating income - the sum of net gains or losses on underwriting, net investment income, and miscellaneous other income - fell $7.1 billion, or 15.9 percent, to $37.8 billion for 2010 from $45 billion for 2009. The $7.1 billion decrease in operating income was the web result of the $7.four billion improve in net losses on underwriting, the $0.2 billion improve in net investment income, along with a $0.1 billion improve in miscellaneous other income to $1 billion for 2010 from $0.9 billion for 2009.
Net gain following Taxes
Combining operating income, realized capital gains (losses), and federal and foreign taxes, the insurance industry’s net income following taxes in 2010 totaled $34.7 billion, up from $28.7 billion for 2009. The $6 billion improve in net income was the net result of the $7.1 billion decrease in operating income, the $13.6 billion swing to $5.7 billion in realized capital gains from $7.9 billion in realized capital losses, and a $0.four billion improve in federal and foreign income taxes to $8.9 billion for 2010 from $8.four billion last year.
Policyholders’ Surplus
Policyholders’ surplus increased $45.five billion to $556.9 billion at year-end 2010 from $511.four billion at year-end 2009. Inclusions in surplus in 2010 included insurers’ $34.7 billion in net gain following taxes, $15.6 billion in unrealized capital gains on investments (not included in net income), and $27.four billion in new funds paid in (new capital raised by insurers). Those additions had been partially offset by $31 billion in dividends to shareholders and $1.2 billion in miscellaneous charges against surplus.
The $27.four billion in new funds paid in throughout 2010 was up from $6.6 billion last year and it is the largest quantity of new funds any year since the start of ISO’s data in 1959. The record-high $27.four billion this year included $22.five billion contributed to 1 insurer by its parent, because the insurer absorbed a main acquisition away from insurance space. The prior record high for brand new funds was $18.8 billion in 2002.
Insurers’ unrealized capital gains on investments dropped to $15.6 billion in 2010 from $23.1 billion in 2009.
The $31 billion in dividends to shareholders this year was up $14.1 billion, or 83.6 percent, in the $16.9 billion last year.
The premium-to-surplus ratio as of December 31, 2010, was 0.76 - much less of computer was any year from 1959 to 2009 and only about half the 1.49 average premium-to-surplus ratio for the 52 years ending 2010. Similarly, the ratio of loss and loss adjustment expense reserves to surplus by December 31, 2010, was 1.00 - the lowest it’s been because the 0.97 for 1968 and far below the 1.42 average LLAE-reserves-to-surplus ratio within the last 52 years.
“With leverage ratios like these providing simple measures from the amount of risk supported by every dollar of surplus, insurers seem to be exceptionally well capitalized at this point,” stated Murray. “But towards the extent that these same leverage ratios provide insight into insurers’ capacity utilization and also the potential supply of insurance, they help explain why some insurance markets have remained so soft for so lengthy.”
Fourth-Quarter Outcomes
The property/casualty insurance industry’s consolidated net gain following taxes fell 34.6 percent to $8 billion for fourth-quarter 2010 from $12.2 billion for fourth-quarter 2009.
Fourth-quarter 2010 net gain for the whole business consisted of $8.7 billion in pretax operating income and $1.three billion in realized capital gains on investments, much less $1.9 billion in federal and foreign income taxes.
The industry’s fourth-quarter pretax operating income of $8.7 billion was down 21.four percent from $11 billion in fourth-quarter 2009. Fourth-quarter 2010 operating income consisted of $4.2 billion in net losses on underwriting, $12.2 billion in net investment income, and $0.6 billion in miscellaneous other income. Excluding mortgage and monetary guaranty insurers, operating income fell $3.four billion, or 25.three percent, to $9.9 billion in fourth-quarter 2010 from $13.three billion in fourth-quarter 2009.
The $4.2 billion in net losses on underwriting in fourth-quarter 2010 compared with $0.2 billion in net gains on underwriting in fourth-quarter 2009.
Fourth-quarter 2010 net losses on underwriting amounted to three.9 percent of the $106.1 billion in premiums earned throughout the period compared with fourth-quarter 2009 net gains on underwriting amounting to 0.2 percent from the $105 billion in premiums earned throughout that period.
The industry’s combined ratio deteriorated to 105.9 percent in fourth-quarter 2010 from 101.9 percent in fourth-quarter 2009.
The $4.2 billion in net losses on underwriting for fourth-quarter 2010 was following deducting $1.2 billion in premiums returned to policyholders as dividends, with dividends to policyholders up 15.three percent from $1 billion in fourth-quarter 2009.
Loss and loss adjustment expenses rose $4.8 billion, or 6.four percent, to $79.7 billion in fourth-quarter 2010 from $74.9 billion in fourth-quarter 2009.
LLAE for fourth-quarter 2010 included approximately $2.9 billion in net LLAE (following reinsurance recoveries) due to catastrophes punching the Usa, with estimated net catastrophe LLAE growing $2.7 billion from $0.2 billion in fourth-quarter 2009. Excluding loss adjustment expenses, direct insured losses from catastrophes throughout fourth-quarter 2010 totaled $2.8 billion, up $2.6 billion in the direct insured losses from catastrophes throughout fourth-quarter 2009, based on ISO’s PCS unit.
Written premiums rose $1.three billion, or 1.three percent, to $98.9 billion in fourth-quarter 2010 from $97.6 billion in fourth-quarter 2009. The 1.three percent improve in fourth-quarter 2010 followed a 2.three percent improve in third- quarter 2010 and a 1.three percent improve in second-quarter 2010. These increases in quarterly written premiums had been the very first since first-quarter 2007, when written premiums rose 0.8 percent in contrast to their level a year earlier.
The $12.2 billion in net investment income in fourth-quarter 2010 was up 9.6 percent compared with the $11.1 billion in net investment income in fourth-quarter 2009. A lot of the improve in fourth-quarter net investment income was attributable to $0.five billion in income 1 insurer received from the newly acquired noninsurance company.
Combining net investment income and realized capital gains, the business posted $13.five billion in net investment gains in fourth-quarter 2010, up five.1 percent from $12.8 billion a year earlier.
Policyholders’ surplus rose $45.5 billion, or 8.9 percent, to $556.9 billion at Dec. 31, 2010, from $511.4 billion for 2009.
Contributing to the increases within the insurance industry’s net gain, overall rate of return, and surplus, insurers net investment gains grew $13.8 billion to $52.9 billion this year from $39.2 billion in 2009.
Partially offsetting the growth in investment gains, insurers’ net losses on underwriting grew to $10.four billion this year from $3 billion last year. The combined ratio (losses along with other underwriting expenses per dollar of premium) deteriorated to 102.four percent this year from 101 percent last year, based on business groups, ISO and also the Property Casualty Insurers Association of America (PCI).
The figures are consolidated estimates for all insurers writing a minimum of 96 percent of company compiled by private U.S. property/casualty insurers.
The trade groups stated the outcomes in 2010 show that insurers are “well positioned” to satisfy the requirements of customers and company owners because the economy recovers in the recession. Combining insurers’ $556.9 billion in policyholders’ surplus as of December 31, 2010, their $557.7 billion in loss and loss adjustment expense reserves, as well as their $199 billion in unearned premium reserves, insurers had $1.three trillion to pay claims and meet other contingencies, stated David Sampson, PCI president and CEO.
Michael R. Murray, ISO assistant vice president for monetary analysis, stated insurers “continue to manage substantial headwinds in their core company - underwriting - with costs however to firm in numerous commercial insurance markets regardless of rising loss and loss adjustment expenses.”
Murray stated that within the near term, economic growth could improve the frequency of claims and and because the economy inches closer to full employment, inflation within the harshness of claims might accelerate.
“But economic growth might also spur increases in demand for insurance that absorb excess capacity quicker than investment gains produce it. If it does, insurers can look forward to a finish towards the soft marketplace, accelerating premium growth, and improvement in underwriting outcomes,” Murray stated.
Rate of Return
The industry’s 6.five percent rate of return in 2010 was the web result of negative rates of return for mortgage and monetary guaranty insurers and single-digit rates of return for other insurers. ISO estimates that mortgage and monetary guaranty insurers’ rate of return normally surplus in 2010 was negative 36.6 percent, up from negative 51.7 percent for 2009. Excluding mortgage and monetary guaranty insurers, the industry’s rate of return edged as much as 7.five percent in 2010 from 7.four percent for 2009.
“Despite the increases in insurers’ net gain and overall rate of return this year, insurers’ outcomes remained subpar,” stated Sampson. He stated insurers’ 6.5 percent rate of return in 2010 was 0.four percentage points much less than their 6.9 percent average rate of return for the past Ten years and 2.6 percentage points much less than their 9.1 % average rate of return for the 52 years from 1959 to 2010. Moreover, insurers’ rate of return remained far below benchmarks such as the 13.9 percent long-term average rate of return for the Fortune 500.
Underwriting Outcomes
Net losses on underwriting grew $7.4 billion to $10.four billion in 2010 as earned premiums fell and loss and loss adjustment expenses (LLAE), underwriting expenses, and dividends to policyholders all rose.
Net written premiums rose $3.7 billion, or 0.9 percent, to $422.1 billion for 2010 from $418.four billion for 2009. But net earned premiums fell $1.8 billion, or 0.four percent, to $420.5 billion from $422.3 billion as a result of prior declines in written premiums.
Net LLAE (following reinsurance recoveries) rose $2.8 billion, or 0.9 percent, to $309.1 billion in 2010 from $306.3 billion last year, largely as a result of greater catastrophe LLAE.
Other underwriting expenses - primarily acquisition expenses; expenses linked with underwriting, pricing, and servicing insurance policies; and premium taxes - rose $2.5 billion, or 2.2 percent, to $119.6 billion this year from $117 billion last year, whilst dividends to policyholders increased $0.3 billion, or 14.4 percent, to $2.3 billion from $2 billion.
ISO estimates that private insurers’ net LLAE from catastrophes striking the United States rose $2.7 billion to $14.three billion for 2010 from $11.6 billion for 2009, with the $11.6 billion for 2009 such as some late-emerging losses from Hurricane Ike in 2008.
Based on ISO’s Property Claim Services (PCS) unit, catastrophes striking the Usa in 2010 caused $13.8 billion in direct insured losses (prior to reinsurance recoveries) for those insurers (such as residual-market insurers and foreign insurers) Up $3.2 billion from $10.6 billion last year but $6.five billion much less than the $20.2 billion average for that Ten years ending 2010.
Noncatastrophe net LLAE rose $0.1 billion to $294.8 billion in 2010 from $294.7 billion for 2009.
Total net LLAE for both 2010 and 2009 was decreased by downward revisions towards the estimated ultimate price of claims incurred in prior years and consequent releases of LLAE reserves. Such downward revisions and releases dropped to $9.7 billion this year from $11 billion in 2009. Excluding those amounts, net LLAE rose $1.5 billion, or 0.5 percent, to $318.8 billion last year from $317.3 billion last year.
“The 0.9 percent improve as a whole business net written premiums in 2010 is definitely welcome news following 3 consecutive years of declines. Moreover - and possibly sending an indication about the nature of issues to come - year-to-year comparisons improved for every from the 3 main subsectors of the business tracked by ISO,” stated Murray.
Net written premium growth for insurers writing predominantly individual lines accelerated to positive three.three percent in 2010 from negative 0.five percent in 2009, with premium growth for insurers writing much more balanced books of company growing to positive 2.1 percent from negative three.6 percent. Premium growth for insurers writing predominantly commercial lines rose to negative 2.7 percent from negative 7.five percent.
Excluding mortgage and monetary guaranty insurers, commercial lines insurers’ net written premiums dropped just 2.2 percent last year, following falling 6.five percent last year.
“The deterioration in underwriting profitability as measured through the combined ratio is really a specific trigger for concern simply because today’s low investment yields together with the long-term decline in investment leverage that helped insulate insurers in the ravages from the monetary crisis and also the Fantastic Recession mean insurers require much better underwriting outcomes just to be as profitable because they as soon as had been,” stated Sampson.
Based on PCI, in 1986, insurers achieved a 15.1 % rate of return having a combined ratio of 108.1 %. Although insurers’ combined ratio for 2010 was five.7 percentage points much better, their rate of return was just 6.five percent - 8.6 percentage points less than in 1986 - due to declines in investment yields and investment leverage.
Investment Outcomes
Insurers’ net investment income - primarily dividends from stocks and interest on bonds - increased by $0.2 billion to $47.2 billion this year from $47.1 billion in 2009. The $5.7 billion in realized capital gains on investments in 2010 constituted a $13.6 billion swing from insurers’ $7.9 billion in realized capital losses on investments last year. Combining net investment income and realized capital gains, overall net investment gains rose 35.2 percent to $52.9 billion this year from $39.2 billion last year.
Combining the $5.7 billion in realized capital gains this year with $15.6 billion in unrealized capital gains throughout the time, insurers posted $21.three billion in overall capital gains this year - a $6.1 billion improve in contrast to insurers’ $15.2 billion in overall capital gains on investments in 2009.
“Unfortunately, insurers’ net investment income in 2010 was even much more anemic than it appears. The $0.2 billion improve reflects $1.three billion that 1 insurer received from the newly acquired affiliate outside the insurance space,” stated Sampson. “Absent the investment income generated by that acquisition and also the new funds raised to invest in it, insurers’ investment income would have declined in 2010. Prospectively, there's still some risk that insurers’ investment income will decline as they replace maturing bonds paying fairly high yields with new bonds paying lower yields.”
Insurers’ overall capital gains for 2010 reflect developments in monetary markets. The New York Stock Exchange composite rose 10.8 percent this past year, using the Dow Jones Industrial Average, the S&P 500, and also the NASDAQ composite climbing 11 percent, 12.8 percent, and 16.9 percent, respectively, based on Murray. He stated insurers’ investment outcomes also benefited from a decline in realized capital losses on impaired investments, which dropped to $5.9 billion this year from $16.1 billion in 2009.
Pretax Operating Income
Pretax operating income - the sum of net gains or losses on underwriting, net investment income, and miscellaneous other income - fell $7.1 billion, or 15.9 percent, to $37.8 billion for 2010 from $45 billion for 2009. The $7.1 billion decrease in operating income was the web result of the $7.four billion improve in net losses on underwriting, the $0.2 billion improve in net investment income, along with a $0.1 billion improve in miscellaneous other income to $1 billion for 2010 from $0.9 billion for 2009.
Net gain following Taxes
Combining operating income, realized capital gains (losses), and federal and foreign taxes, the insurance industry’s net income following taxes in 2010 totaled $34.7 billion, up from $28.7 billion for 2009. The $6 billion improve in net income was the net result of the $7.1 billion decrease in operating income, the $13.6 billion swing to $5.7 billion in realized capital gains from $7.9 billion in realized capital losses, and a $0.four billion improve in federal and foreign income taxes to $8.9 billion for 2010 from $8.four billion last year.
Policyholders’ Surplus
Policyholders’ surplus increased $45.five billion to $556.9 billion at year-end 2010 from $511.four billion at year-end 2009. Inclusions in surplus in 2010 included insurers’ $34.7 billion in net gain following taxes, $15.6 billion in unrealized capital gains on investments (not included in net income), and $27.four billion in new funds paid in (new capital raised by insurers). Those additions had been partially offset by $31 billion in dividends to shareholders and $1.2 billion in miscellaneous charges against surplus.
The $27.four billion in new funds paid in throughout 2010 was up from $6.6 billion last year and it is the largest quantity of new funds any year since the start of ISO’s data in 1959. The record-high $27.four billion this year included $22.five billion contributed to 1 insurer by its parent, because the insurer absorbed a main acquisition away from insurance space. The prior record high for brand new funds was $18.8 billion in 2002.
Insurers’ unrealized capital gains on investments dropped to $15.6 billion in 2010 from $23.1 billion in 2009.
The $31 billion in dividends to shareholders this year was up $14.1 billion, or 83.6 percent, in the $16.9 billion last year.
The premium-to-surplus ratio as of December 31, 2010, was 0.76 - much less of computer was any year from 1959 to 2009 and only about half the 1.49 average premium-to-surplus ratio for the 52 years ending 2010. Similarly, the ratio of loss and loss adjustment expense reserves to surplus by December 31, 2010, was 1.00 - the lowest it’s been because the 0.97 for 1968 and far below the 1.42 average LLAE-reserves-to-surplus ratio within the last 52 years.
“With leverage ratios like these providing simple measures from the amount of risk supported by every dollar of surplus, insurers seem to be exceptionally well capitalized at this point,” stated Murray. “But towards the extent that these same leverage ratios provide insight into insurers’ capacity utilization and also the potential supply of insurance, they help explain why some insurance markets have remained so soft for so lengthy.”
Fourth-Quarter Outcomes
The property/casualty insurance industry’s consolidated net gain following taxes fell 34.6 percent to $8 billion for fourth-quarter 2010 from $12.2 billion for fourth-quarter 2009.
Fourth-quarter 2010 net gain for the whole business consisted of $8.7 billion in pretax operating income and $1.three billion in realized capital gains on investments, much less $1.9 billion in federal and foreign income taxes.
The industry’s fourth-quarter pretax operating income of $8.7 billion was down 21.four percent from $11 billion in fourth-quarter 2009. Fourth-quarter 2010 operating income consisted of $4.2 billion in net losses on underwriting, $12.2 billion in net investment income, and $0.6 billion in miscellaneous other income. Excluding mortgage and monetary guaranty insurers, operating income fell $3.four billion, or 25.three percent, to $9.9 billion in fourth-quarter 2010 from $13.three billion in fourth-quarter 2009.
The $4.2 billion in net losses on underwriting in fourth-quarter 2010 compared with $0.2 billion in net gains on underwriting in fourth-quarter 2009.
Fourth-quarter 2010 net losses on underwriting amounted to three.9 percent of the $106.1 billion in premiums earned throughout the period compared with fourth-quarter 2009 net gains on underwriting amounting to 0.2 percent from the $105 billion in premiums earned throughout that period.
The industry’s combined ratio deteriorated to 105.9 percent in fourth-quarter 2010 from 101.9 percent in fourth-quarter 2009.
The $4.2 billion in net losses on underwriting for fourth-quarter 2010 was following deducting $1.2 billion in premiums returned to policyholders as dividends, with dividends to policyholders up 15.three percent from $1 billion in fourth-quarter 2009.
Loss and loss adjustment expenses rose $4.8 billion, or 6.four percent, to $79.7 billion in fourth-quarter 2010 from $74.9 billion in fourth-quarter 2009.
LLAE for fourth-quarter 2010 included approximately $2.9 billion in net LLAE (following reinsurance recoveries) due to catastrophes punching the Usa, with estimated net catastrophe LLAE growing $2.7 billion from $0.2 billion in fourth-quarter 2009. Excluding loss adjustment expenses, direct insured losses from catastrophes throughout fourth-quarter 2010 totaled $2.8 billion, up $2.6 billion in the direct insured losses from catastrophes throughout fourth-quarter 2009, based on ISO’s PCS unit.
Written premiums rose $1.three billion, or 1.three percent, to $98.9 billion in fourth-quarter 2010 from $97.6 billion in fourth-quarter 2009. The 1.three percent improve in fourth-quarter 2010 followed a 2.three percent improve in third- quarter 2010 and a 1.three percent improve in second-quarter 2010. These increases in quarterly written premiums had been the very first since first-quarter 2007, when written premiums rose 0.8 percent in contrast to their level a year earlier.
The $12.2 billion in net investment income in fourth-quarter 2010 was up 9.6 percent compared with the $11.1 billion in net investment income in fourth-quarter 2009. A lot of the improve in fourth-quarter net investment income was attributable to $0.five billion in income 1 insurer received from the newly acquired noninsurance company.
Combining net investment income and realized capital gains, the business posted $13.five billion in net investment gains in fourth-quarter 2010, up five.1 percent from $12.8 billion a year earlier.
0 comments
Post a Comment