American Property Casualty Insurance Association
  • Staff Contact: Jeffrey Brewer     
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  • January 19, 2017
  • Property/Casualty Insurers Report $1.7 Billion Net Underwriting Loss in Nine-Months 2016
  • JERSEY CITY, N.J., January 19, 2017 — Private U.S. property/casualty insurers suffered a $1.7 billion net underwriting loss in the first nine months of 2016—following a $7.3 billion net underwriting gain in nine-months 2015—and experienced a drop in net income after taxes to $31.8 billion from $44.1 billion a year earlier, according to ISO, a Verisk Analytics (Nasdaq:VRSK) business, and the Property Casualty Insurers Association of America (PCI).


    Insurers’ combined ratio deteriorated to 99.5 percent in nine-months 2016 from 96.9 percent in nine-months 2015, and net written premium growth slowed to 2.8 percent in nine-months 2016 from 4.1 percent a year earlier. Net investment income dropped to $33.0 billion in nine-months 2016 from $34.9 billion a year earlier, and realized capital gains decreased to $5.6 billion from $8.8 billion, resulting in $38.6 billion in net investment gains for nine-months 2016, down $5.1 billion from a year earlier.

    Direct insured property losses from catastrophes striking the United States totaled $17.4 billion in nine-months 2016, up from $13.1 billion a year earlier and above the $15.9 billion average nine-months direct catastrophe losses for the past ten years.

    “The industry’s results continued to decline in the first nine months of 2016. Higher catastrophe losses and less favorable reserve development pushed the combined ratio above 99 percent and resulted in a net underwriting loss for the second quarter in a row. At the same time, there are some promising signs in the industry. Policyholders’ surplus continued to grow and reached a record high of $688.3 billion. The Federal Reserve raised interest rates in December 2016 and is expected to increase rates further in 2017. Still, it will take time for insurers’ investment yields to improve. To succeed in today’s market, insurers need to be focused on their underwriting. Those that incorporate robust data and analytics will be equipped to make the best possible decisions about the risks they insure.”


    “Although property/casualty insurance industry surplus and premium-to-surplus ratios continue to be historically strong, financial operating results deteriorated in almost all categories. Profitability has been sluggish; and premium growth, underwriting gains, pretax operating and net income, and combined ratios have all worsened. According to industry statistics that we’re monitoring, some of the poor performance is a result of increasing loss ratios in the auto lines, which were affected by rising accident frequency and severity. The combined ratio for personal lines insurers deteriorated to 102.9 percent, with significant increases in personal auto loss ratios. Commercial auto loss ratios also increased. As we move forward, it’s important for all the stakeholders—including consumers, insurers, and policymakers—to take significant steps to reduce the growth of auto losses.”


    Beth Fitzgerald, President of ISO Solutions

    Robert Gordon, PCI’s Senior Vice President for Policy Development and Research

    Third-Quarter Results

    Insurers’ net income after taxes fell to $10.1 billion in third-quarter 2016 from $13.1 billion in third-quarter 2015, and their combined ratio worsened to 99.0 percent in third-quarter 2016 from 95.7 percent a year earlier.

    Their annualized rate of return on average surplus dropped to 5.9 percent in third-quarter 2016 from 7.8 percent a year earlier.

    Net written premiums rose $3.1 billion, or 2.3 percent, to $139.2 billion in third-quarter 2016 from $136.1 billion in third-quarter 2015.

    View the full report from ISO and PCI here.

    About ISO 
    Since 1971, ISO has been a leading source of information about property/casualty insurance risk. For a broad spectrum of commercial and personal lines of insurance, ISO provides statistical, actuarial, underwriting, and claims information and analytics; compliance and fraud identification tools; policy language; information about specific locations; and technical services. ISO serves insurers, reinsurers, agents and brokers, insurance regulators, risk managers, and other participants in the property/casualty insurance marketplace. ISO is a Verisk Analytics (Nasdaq:VRSK) business. For more information, please visit



    Giuseppe Barone/Colleen Bonanni
    MWW Group (for ISO)


    Jeffrey Brewer for PCI
    (847) 553-3763

    Loretta Worters for I.I.I.
    (212) 346-5500

  • PCI promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. PCI is composed of nearly 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write $220 billion in annual premium, 37 percent of the nation's property casualty insurance. Member companies write 44 percent of the U.S. automobile insurance market, 30 percent of the homeowners market, 35 percent of the commercial property and liability market and 37 percent of the private workers compensation market.
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