Private property and casualty insurers in the US posted strong results for the first quarter of 2018, a report has revealed.
According to a report jointly released by ISO and the Property Casualty Insurers Association of America (PCI), P&C insurers saw their net income after taxes more than double to $17.1 billion in Q1 2018, from $7.9 billion in Q1 2017.
The report also found that losses and loss adjustment expenses from catastrophes fell to $5.0 billion in the first quarter of 2018 from $7.7 billion during the same quarter last year. Favourable reserve development totalled $7.4 billion during the quarter, compared with $5.5 billion a year earlier. Insurers overall saw their net underwriting results rise to $4.2 billion in Q1 2018 – an improvement after suffering seven quarters straight of underwriting losses.
Insurers also experienced a 15.7% increase in net written premiums – a jump from 4.0% a year earlier. Earned premium growth also jumped to 9.4% from 3.5%. The report suggested that the net premiums were affected by multiple insurers changing the way they utilise offshore reinsurance and keeping more premiums within the US. There was also an improvement in direct premium growth, thanks to stronger US economic activity.
“The strong results of insurers reflect several developments affecting the industry,” remarked ISO president Neil Spector.
Spector additionally suggested that insurers during the first quarter of 2018 benefited from significantly lower catastrophe losses than a year ago, when three separate wind and thunderstorm events each resulted in over $1 billion in damages.
“This year, the industry’s first-quarter underwriting results were the best since the third quarter of 2013, with significant improvements in insurers’ combined ratios and net income after taxes,” said PCI senior vice-president for policy, research and international Robert Gordon.
Gordon commented that the results for the quarter were likely affected by market shifts resulting from last December’s federal tax reform.