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A.M. Best Gives Mixed Reviews in 2010 for P/C Sector and Continued Recovery for Life/Health

Source: Business Wire

Posted on 24 Mar 2011

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A.M. Best Co. released two Statistical Studies summarizing the financial results of the U.S. property/casualty and life/health industries for 2010.

The property/casualty study reports on several improved metrics during 2010, although there is ongoing caution, as the industry entered 2011 with a key declining factor. In particular, policyholder’s surplus (PHS) increased 9.0%, posting the industry’s largest-ever recorded level in PHS. Additionally, net premiums written (NPW) reflects its first increase following three consecutive years of decline, which included its largest single-year decline, posted in 2009. Admitted assets, direct premiums written (DPW) and net leverage also improved, based on the reported year-end 2010 results. However, the industry’s after-dividend combined ratio reflected an increase of 2.2 over 2009 year-end results, generating 102.1 and posting unprofitable underwriting results recorded during 2010.

On the life/health side, continued progress was also made toward recovery from the financial crisis. The U.S. life/health industry’s 2010 financial results recovered lost ground as key economic indicators improved. This is reflected in admitted assets, after-tax net operating gain (albeit modestly lower than prior year), and capital trends while NPW resumed growth. Total admitted assets for the U.S. life/health industry increased 7.1% from year-end 2009 to $5.3 trillion. The U.S. life/health industry recorded an after-tax net operating gain of $42.2 billion in 2010. Capital and surplus, including the asset valuation reserve, increased 8.7% to $338.4 billion from year-end 2009. NPW increased 14.5% to $543.5 billion in 2010 for the total U.S. life/health industry compared to the same period in 2009. This reflects the first time annual NPW has advanced since year-end 2008.