The report indicates that the combined ratio for the U.S. reinsurance segment, which was affected by catastrophe losses and smaller margins on non-CAT business, deteriorated to 99.9% in 2008, from 93.6% in 2007.
The worst financial crisis in recent history and cat losses, among other factors, says the report, have resulted in the industry in 2008 to face unprecedented challenging market conditions. The entire U.S. property/casualty industry reported a $20 billion underwriting loss in 2008, vs. a $21.6 billion underwriting gain in 2007.
According to A.M. Best, net premiums written fell 1.8%, to $439.9 billion in 2008. They also fell in 2007, which makes this the first time it has fallen in consecutive years since 1932 and 1933.
The report also indicated that although the industry generally continued to invest conservatively and remained well-diversified, its net investment income dropped 47%, to $34.1 billion in 2008. Its policyholder surplus dropped 11.3%, to $465.4 billion.