The U.S. P/C insurance industry saw its net underwriting income rebound substantially in the first half of 2018, according to a new A.M. Best special report.

That number reached $5.3 billion for H1 2018 versus a $5 billion underwriting loss over the same period in 2017. A.M. Best credits a growth in net premiums written and investment income over the previous year with driving the positive underwriting results. A return to more normal catastrophe losses also helped.

Highlights from the 2018 first half, as cited by the A.M. Best report:

  • Net premiums written grew 13.3 percent year-over-year, offsetting other costs such as a spike in losses, a nearly 13 percent jump in underwriting expenses and a 10.1 percent hike in policyholder dividends.
  • The industry combined ratio improved 4.5 points for the first half to 96.4, a result A.M. Best said reflects the lowest six-month period combined ratio in five years.
  • Net investment income was $27.2 billion for the 2018 first half versus $23.5 billion in H1 2017—a 15.9 percent jump.
  • Realized capital gains grew by $2 billion.
  • A jump in net income along with $5.7 billion in contributed capital helped offset $10.5 billion in unrealized losses and $17.2 million in stockholder dividends. The end result: an industry surplus of $755.8 billion, 1.5 percent higher than the end of 2017.

A.M. Best’s full report is: “First Look – First Half 2018 Property/Casualty Financial Results.”

Source: A.M. Best