Today, as expected, saw the property/casualty industry report record financial results for 2006. Here are the headline stats: the industry turned in its best underwriting performance since 1949, with a combined ratio of 92.4; profits (net income after taxes) increased by $19.5 billion, or 44.3 percent, to $63.7 billion from $44.2 billion in 2005; the industry’s rate of return on average surplus rose to 14.0 percent in 2006, up from 10.8 percent in 2005 and the best result since 1987. While applauding what is generally an excellent set of results, it’s important to look at our industry’s financial performance in 2006 in a broader context. As Dr. Robert Hartwig, I.I.I.’s president and chief economist, notes in his analysis the sharp decline in catastrophe losses from $61.9 billion in 2005 to $9.2 billion last year is too often cited as the primary reason for the surge in profits. Other key factors played a role and the industry’s extraordinary performance during 2006 is unlikely to be repeated for decades.