The US P&C insurance industry saw a streak of net underwriting profitability come to an end when it recorded a loss of $1.5 billion in the first half of 2016, compared with a $3.5 billion underwriting profit in the first half 2015.
The loss marked the industry’s first year-to-date net underwriting loss in more than three years, according to a report from Verisk’s ISO, the Insurance Information Institute and the Property Casualty Insurers Association of America.
First-half net income fell to $21.7 billion from $31 billion during the same time a year ago.
Catastrophe losses during the first six months of the year worsened to $13.5 billion compared with $10.7 billion during the first half 2015. Average direct catastrophe losses for the last decade have been $11.6 billion.
Direct insured losses from catastrophes in the US during 2016 second-quarter totaled $8.5 billion, up from $7.1 billion in direct insured losses from catastrophes in second-quarter 2015.
“Catastrophe losses remained higher than in previous years,” said Beth Fitzgerald, president of ISO Solutions. “Texas was hit by a hailstorm that has been described as the costliest in the state’s history, and several states in the central United States experienced severe thunderstorms.”
Insurers’ combined ratio in the first half weakened to 99.8 compared with 97.6 in the first half last year.