Property/Casualty Insurers, a private American company, reported that after taxes, their net income fell to $7.8 billion within 2011’s first quarter from last year’s first-quarter profits which were at $8.9 billion.
Moreover, there was a drop from 6.8 percent to 5.6 percent in that insurer’s average policyholder surplus annualized rate of return. As a result of the net income of the insurer of $7.8 billion after taxes, the surplus of policyholders did rise by 1.4 percent to $7.8 billion, to hit a record by March 31 of $564.7 billion. This was up from December 31, 2010, which sat at $556.9 billion.
Blamed for the insurers’ declines in net income and decreasing overall rate of return were the increases in net losses on underwriting. In the 2011 first quarter, they rose to $4.5 billion, which was significantly higher than the first quarter of 2010, when they were $1.8 billion.
According to the Property Casualty Insurers Association of America (PCI) and the ISO, the ratio, when combined, brought the first quarter down to 103.3 percent in 2011, from having been 101.1 percent during the same quarter in 2010.
Some of the decrease in the underwriting outcomes were offset by the gains in net investment, which increased by $1 billion to reach $13.5 billion within 2011’s first quarter, where 2010’s first quarter was $12.6 billion. Furthermore, additional miscellaneous income grew by $0.1 billion to $0.5 billion in the first quarter of 2011, when it had been $0.4 billion in 2010. Federal and foreign income taxes to insurers have fallen by $0.5 billion to $1.8 billion in 2011, where they were $2.3 billion in 2010.