P/C industry surplus on upward trend: ISO, PCI

Private US property/casualty insurers saw investment gains push the industry’s surplus to a new all-time-high value of USD752.5 billion in 2017, a USD51.7 billion increase from 2016, and catastrophe losses suppressed the industry’s net income after taxes to USD36.1 billion in 2017, a 15.8 percent decline from a year earlier, according to ISO, a Verisk business, and the Property Casualty Insurers Association of America (PCI).

The industry’s net investment income increased to USD49.0 billion in 2017 from USD46.6 billion a year earlier, and net written premium growth rebounded to 4.6 percent for 2017 from 2.7 percent in 2016.

Losses and loss adjustment expenses (LLAE) rose 8.4 percent in 2017, significantly exceeding the 3.3 percent earned premium growth. The increase in LLAE was driven by catastrophe losses, as three major hurricanes—Harvey, Irma, and Maria—made landfall in the United States in the third quarter, followed by devastating California wildfires in the fourth. The net underwriting loss reached USD23.2 billion, far exceeding the USD4.7 billion underwriting loss for 2016, according to a press release issued by the company.