[November 21, 2018]

Best's Special Report: Preliminary Nine-Month 2018 Results Show Sharp Turnaround in Underwriting Income for U.S. Property/Casualty Industry

The U.S. property/casualty (P/C) industry's net underwriting income improved in the first nine months of 2018 to $3.5 billion, compared with a $21.2 billion underwriting loss in the same prior-year period. This financial review is detailed in a new Best's Special Report, titled, "A.M. Best First Look- Nine-Month 2018 Property/Casualty Financial Results." The data is derived from companies' nine-month 2018 interim statutory statements received as of Nov. 19, 2018, representing an estimated 97% of the total P/C industry's net premiums written.

The nine-month 2018 underwriting results were driven by growth in net premiums written of 11.3% over the same prior-year period. Loss and loss adjustment expenses (LAE) incurred remained flat, while underwriting expenses and policyholder dividends increased, by 12.2% and 3.0%, respectively. With premium increases outpacing the growth in incurred losses and expenses during the first nine months of 2018, the combined ratio for the industry improved 6.7 points from the prior-year period to 97.6. In ddition, catastrophe losses in the first nine months of 2018 returned to a more normalized level and accounted for an estimated 5.1 points on the nine-month 2018 combined ratio, compared with 9.9 points in the prior-year period.

The industry's nine-month 2018 results also reflected a $6.2 billion increase in net investment income and a $5.0 billion improvement in other income. Coupled with the strong underwriting improvement, these items offset a $5 billion decline in realized capital gains and a $4.8 billion increase in taxes incurred, boosting industry net income to $49.1 billion, a $27.1 billion increase from the prior-year period.

To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=280333.

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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