JERSEY CITY, N.J., June 26, 2017 — The private U.S. property/casualty insurance industry saw its net income after taxes drop to $7.7 billion in first-quarter 2017 from $13.4 billion in first-quarter 2016—a 42.2 percent decline—and its overall profitability as measured by its annualized rate of return on average policyholders’ surplus fall to 4.4 percent from 7.9 percent, according to ISO, a Verisk Analytics (Nasdaq:VRSK) business, and the Property Casualty Insurers Association of America (PCI).
The industry experienced $7.3 billion in direct catastrophe losses—the highest first-quarter catastrophe losses since the 1994 Northridge earthquake and $2.3 billion above the direct catastrophe losses for first-quarter 2016. Insurers’ combined ratio deteriorated to 99.6 percent for first-quarter 2017 from 97.4 percent for first-quarter 2016.
Insurers also saw some improvement from a year earlier. Net written premium growth accelerated to 4.0 percent for first-quarter 2017 from 3.2 percent for first-quarter 2016. Net investment gains increased by $1.2 billion to $14.4 billion in first-quarter 2017 from $13.2 billion for first-quarter 2016. The industry’s surplus reached a new all-time high value of $709.0 billion as of March 31, 2017, increasing $8.1 billion from $700.9 billion as of December 31, 2016.
 Net investment gains equal the sum of net investment income and realized capital gains (or losses) on investments.
 Policyholders’ surplus is insurers’ net worth measured according to Statutory Accounting Principles.
View the full report from ISO and PCI here.
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 www.verisk.com/iso.