P/C INSURERS POSITIONED TO WEATHER HURRICANE LOSSES:
Even with the nearly $21 billion of hurricane-related losses expected to be reflected in the third and fourth quarter results, the nation’s property/casualty insurers are well-capitalized and safely positioned to recover without much difficulty, according to Weiss Ratings Inc. The industry posted impressive performance numbers during the second quarter of 2004, with a $9.2 billion net underwriting gain, representing a 560 percent jump over the $2.0 billion underwriting loss reported for the same period in 2003. Property and casualty insurers reporting the largest improvements in underwriting performance include: State Farm Mutual Auto, Allstate, Hartford Fire, State Farm Fire & Casualty and Hartford Accident & Indemnity. As the result of another solid underwriting performance by the industry, property/casualty insurers’ earnings also climbed, jumping to $24 billion at June 30, 2004, a 53.8 percent increase over the $15.6 billion earned in the first six months of 2003. Insurers reporting the largest year-over-year increases in net income include: State Farm Mutual Auto, State Farm Fire & Casualty, Allstate, National Indemnity and Hartford Accident & Indemnity. “Although hurricane losses will materially impact the industry’s profits, very few insurers are expected to have problems meeting the needs of policyholders,” said Melissa Gannon, vice president of Weiss Ratings. The industry’s strong performance has also led to a $71.9 billion, or 18 percent, increase in capital and surplus, which surged from $398.6 billion at June 30, 2003 to $470.5 billion at June 30, 2004. Property and casualty insurers reporting the largest increases in capital and surplus were: State Farm Mutual Auto, National Indemnity, Hartford Fire, Liberty Mutual, and Allstate. “The substantial growth in capital and surplus is another indicator that the industry can withstand the hurricane losses of this past summer,” Gannon said.
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