The U.S. property/casualty (P/C) industry saw its net underwriting income fall in first-quarter 2021 by 53 percent as compared with the same prior-year period, according to preliminary financial results analyzed by AM Best.
Increases in incurred losses, loss adjustment expenses and underwriting expenses, as well as a sharp 72 percent rise in policyholder dividends, were behind the underwriting income decline, according to a report from AM Best.
Underwriting income declined despite 2.3 percent growth in net earned premiums in the quarter.
The report notes that the combined ratio for the P/C industry deteriorated to 96.4 from 95.0 in the first quarter of 2020. Catastrophe losses accounted for an estimated 6.9 points on the three-month 2021 combined ratio, up from an estimated 3.3 points in first-quarter 2020.
The financial review is detailed in Best’s Special Report, “First Look: Three-Month 2021 Property/Casualty Financial Results.” The data is derived from companies’ three-month 2021 interim statutory statements that were received as of June 1, representing an estimated 99 percent of the total P/C industry’s net premiums written.
With net investment declining slightly, the drop in underwriting income drove a 12.9 percent reduction in pre-tax operating income. As tax expenses were down 18.4 percent and realized capital gains were up $4.1 billion, industry net income increased by 11.4 percent from the same prior-year period to $20.2 billion.
Source: AM Best