Driving the increases in insurers’ net income and rate of return, net losses on underwriting fell by $16.6 billion to $3.2 billion through nine-months 2009 from $19.8 billion through nine-months 2008, as claim costs (loss and loss adjustment expenses) dropped $26.5 billion, according to ISO and the Property Casualty Insurers Association of America (PCI).
Third-Quarter Results
The industry’s consolidated net income after taxes for third-quarter 2009 amounted to $10.4 billion — a $20.2 billion swing from the industry’s $9.8 billion net loss after taxes for third-quarter 2008. Reflecting the increase in net income, property/casualty insurers’ annualized rate of return on average surplus rose to 8.7 percent in third-quarter 2009 from negative 7.9 percent a year earlier.