P/C Q1 Hurt by Catastrophe Losses, Lower Investment Gains: A.M. Best

July 8, 2016

It is clear now: the jump in catastrophe losses during the 2016 first quarter along with lower investment gains hurt U.S. property casualty insurers’ bottom lines.

While the P/C industry posted a $2.1 billion underwriting gain for the quarter, that is a drop from $3.9 billion over the same period in 2015, A.M. Best said in a new special report. Additionally, the industry combined ratio, while good at 97.4, reflected an uptick over the 95.8 figure from the 2015 first quarter, stemming from flooding and other storm damage.

As well, A.M. Best said that net investment income and realized gains fell during Q1, both due to increased market volatility in the early part of Q1, plus pressure on yields due to continued lower rates on reinvestment.

Other report highlights:

The full report is titled: “Resurgent Catastrophe Losses and Declining Investment Income Impact U.S. property/Casualty First Quarter Results.”

Source: A.M. Best