U.S. P&C industry sees net income tumble in 2011 Q1

The U.S. property and casualty industry’s net income after taxes plunged almost 30% in 2011 Q1, falling from a net gain of $12.7 billion in 2010 Q1 to $9 billion in the first quarter of this year, A.M. Best reports.A.M. Best cites an underwriting loss of $3.6 billion for the deterioration in results. The underwriting loss was attributable to an unusually high level of catastrophe-related losses and to a lesser extent, diminished reserve releases.During 2011 Q1, the industry reported a combined ratio of 102.3% – up from 99.3% in 2010 Q1.The industry continued to release reserves in 2011, according to A.M. Best. “The U.S. P&C industry recorded favourable reserve development on prior accident years of $5.3 billion during 2011 Q1, a benefit of 5.1 points on the industry’s combined ratio,” A.M. Best says in its report, U.S. PC 1st Quarter Financial Review – June 302011. “This compares with 2010 Q1, when the industry recorded favourable reserve development on prior accident years of $6.7 billion, a benefit of 6.6 points on the industry’s combined ratio.”