U.S. property and casualty industry reports net profits in Q1, despite catastrophe losses

The U.S. property and casualty industry posted a net income of $11.5 billion in 2010 Q1, marking a rebound from the net loss of $900 million posted in the same period of 2009, reports AM Best.The turnaround was driven primarily by improving financial markets and came despite “an unusually high level” of catastrophe-related losses, said AM Best in its Special Report.The industry reported a combined ratio of 101% in 2010 Q1, compared with 102.2% during 2009 Q1. The improvement reflects “favourable reserve development on prior accident years and significant but reduced losses in the mortgage and financial guaranty segments.”Net premiums written receded for “an unprecedented 10th consecutive quarter,” dropping 1.2% to $105.8 billion in 2010 Q1 “amid sustained competitive market conditions in most commercial lines, weak exposure growth, excess capacity and growth in alternative forms of risk transfer,” the report says.