"Property/casualty insurers absorbed a pounding" in the first quarter, said Michael Murray, assistant vice president for financial analysis at Insurance Services Offices Inc., in a statement today. The industry reported a $1.3 billion net loss, compared with an $8.5 billion profit in the year-earlier period, according to ISO.
Results have been pressured as the recession lowers the value of bonds backing policies and carriers reduce prices to maintain business from cash-strapped clients. New York-based AIG lost $4.4 billion in the first quarter and Allstate of Northbrook, Illinois reported a deficit of $274 million.
Policy sales dropped a record 3.6 percent in the first quarter to $106.4 billion, ISO said. Policyholders’ surplus, a cushion against unexpected levels of claims, fell $19 billion, or 4.2 percent, to $437.1 billion on March 31 from the end of December, ISO said.
Unrealized investment losses, which aren’t deducted from earnings, widened by $16.4 billion in the first three months of the year, ISO said.
ISO said its market data extends back to 1986. The industry is more vulnerable to losses in the second half of a year because of the U.S. hurricane season.