Highlights

The second quarter of 2020—which delivered the fastest descent into the steepest U.S. economic contraction since the Great Depression—was not nearly as tough for the financial performance of the property/casualty (P/C) insurance industry as we had expected, so the first half overall remains an attractive one.

2020 first-quarter data in comparison to both the previous quarter and the first quarters of prior years, gave little hint of the shock that was to follow in 2020’s second quarter. Indeed, for the property/casualty (P/C) insurance industry, the first quarter of 2020 generally went well. Although there were some bumps in the road—policyholders’ surplus fell by $75 billion, or -9.0 percent, from the 2019 year-end level—most measures of financial results (premiums, underwriting results, investments, surplus level in relation to net written premiums, and profitability) were positive. The industry results were released by ISO, a Verisk Analytics company, and the American Property Casualty Insurance Association (APCIA). A discussion of the key drivers of the quarter’s performance follows.

2019 was a solid, profitable year for the property/casualty (P/C) industry, with contributions to profit from both insurance and investment operations. Net income after taxes was $61.4 billion.
The combined ratio for 2019 was 98.9, slightly better than the 99.2 in 2018.
At the end of 2019, industry surplus attained its highest-ever level—$847.8 billion. This was driven largely by unrealized capital gains from a soaring stock market in the second, third, and fourth quarters of the year and declining interest rates.

For the first three quarters of 2019, the property/casualty industry’s financial results were quite profitable, and roughly comparable to 2018 results.

Highlights

The property/casualty insurance industry had a comparatively strong first quarter in 2019. Premium flows, underwriting gains and profitability measures were all higher than most first quarters in the previous decade.

For the U.S. property/casualty (P/C) insurance industry, 2018 was a year of unusual experience. Results were good in comparison with 2017—but 2017 was a horrible year. Premiums, investment income and profits rose, buoyed by a surprisingly strong (for this late in the business cycle) U.S. economy, but interest rates sagged, and fears of a looming recession grew.

For the first three quarters of 2018, the property/casualty industry’s financial results were strongly profitable, thanks to positive contributions from insurance operations and investments.

Highlights

The property/casualty (P/C) insurance industry had a comparatively strong first quarter in 2018. Premium flows, underwriting gains and profitability measures were all higher than most first quarters in the previous decade.