A.M. Best Special Report: P/C Insurers Post Strong Results, First Drop in NPW Since...

A.M. Best Special Report: P/C Insurers Post Strong Results, First Drop in NPW Since 1943

OLDWICK, N.J.--(Business Wire)--
A strong fourth quarter capped another solid year for the U.S.
property/casualty industry, but year-end 2007 results fell short of
the record profits recorded in 2006. The industry's net income fell
almost 7.0% to $66.5 billion from $71.3 billion in 2006. The
industry's after-tax return on equity slipped to 13.0% in 2007 from
15.3% recorded in 2006.

-- The U.S. P/C industry recorded its second consecutive
underwriting profit in 2007, posting a $22.1 billion gain,
compared with $32.0 billion in 2006.

-- Driven by across-the-board softening in personal and
commercial lines pricing, leakage of premium and a growing
interest in alternative forms of risk transfer, net premiums
written fell nearly 1.0% to $446.0 billion in 2007.

-- The industry's combined ratio deteriorated modestly to a still
profitable 94.9 in 2007, up from 92.2 in 2006.

-- Strong operating results pushed policyholder surplus up by
7.1% to $527.5 billion in 2007 from $492.8 billion at year-end
2006.

-- Total catastrophe losses were an estimated $6.7 billion in
2007--among the lowest years on record, down from $9.2 billion
in 2006.

-- The personal lines segment's underwriting results remained
strong on favorable but flattening private passenger auto
loss-frequency trends, moderate but increasing loss-severity
trends and a lack of significant catastrophes.

-- The commercial lines segment reported its second consecutive
underwriting profit in 2007, reflecting continued underwriting
discipline, favorable loss-reserve development and mild
catastrophe losses.

-- The U.S. reinsurance segment reported a combined ratio of 94.4
in 2007, slightly better than the 94.9 reported for 2006.

-- The U.S. P/C industry is projected to record a modest
underwriting gain in 2008, as insurers are expected to
maintain the delicate balance between growth opportunities and
profitability.

BestWeek subscribers can download a PDF copy of all full special
reports at no additional cost or a combination of the PDF copies plus
all related spreadsheet files of the report data at no additional cost
from our Web site at www.bestweek.com.

Nonsubscribers can download a PDF copy of the full special report
(8 pages) for $55 or a combination of the PDF copy plus the
spreadsheet file of the report data for $140 from our Web site at
www.bestweek.com. Call customer service for more information, (908)
439-2200, ext. 5742.

Founded in 1899, A.M. Best Company is a global full-service credit
rating organization dedicated to serving the financial and health care
service industries, including insurance companies, banks, hospitals
and health care system providers. For more information, visit
www.ambest.com.

A.M. Best Company
Analysts:
Edward Keane, 908-439-2200, ext. 5291
edward.keane@ambest.com
or
Michelle Baurkot, 908-439-2200, ext. 5507
michelle.baurkot@ambest.com
or
Public Relations:
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com

Copyright Business Wire 2008