The American property and casualty (P/C) industry has released its estimates for the losses it experienced in 2011
– a year filled with catastrophe – and has reported the largest underwriting losses that it has seen since 2006.
According to A.M. Best Co., the ratings agency, in 2011, insurance companies were impacted by a tremendous number of natural catastrophes, unlike the volumes that have ever been experienced either within the United States or internationally. As a result, the losses from catastrophe-related damages were more than twice the amount that had been reported the year before.
Because of this, says A.M. Best, all three P/C segments – including U.S. reinsurers, commercial lines, and personal lines – will likely be releasing reports of sizeable underwriting losses, and it is expected that there will be a slight decline in the policyholders’ surplus in the industry, and there should be low single digit return measures.
A.M. Best has estimated that there has been an estimated increase of 3.5 percent in net premiums written, which brought them to $442.0 billion in 2011. It reported that the combined ratio for the industry should be deteriorating by 6.5 points to 107.5 percent in 2011. Comparatively, it had been 101.0 percent in 2010.
It was also estimated by the ratings agency, that in 2011, there was a total $44.1 billion in statutory pretax accident-year catastrophe-related losses. This was an increase over 2010’s estimated $19.6 billion in payouts.
However, despite the losses that the industry has seen, A.M. Best still believes that there was a drop of only 1.4 percent to the policyholders’ surplus, bringing it to $562.7 billion, which is only slightly down from the 2010 figure, which was $570.4 at a record year-end high.