P&C insurers' net income drops by half in 1st-qtr

NEW YORK, June 24 (Reuters) - Profits for U.S. property-casualty insurers were halved in the first quarter, on lower underwriting and investment income, according to trade groups that track the sector's financial performance.

Quarterly after-tax net income for property-casualty insurers fell to $8 billion, from $16 billion in the year-earlier period, said insurance trade group ISO and the Property Casualty Insurers Association of America (PCI) in a statement on Tuesday.

The results were dragged down by deterioration in mortgage and financial guaranty insurers' profits, stemming from a slump in mortgages and wider credit problems.

Excluding mortgage and financial guaranty insurers, the sector's net income would have declined 24 percent, said Michael Murray, ISO's assistant vice-president for financial analysis.

The earnings slump may also indicate a tough year ahead for the industry, said PCI Chief Executive David Sampson.

"Insurers' profitability in the first quarter usually exceeds their profitability later in the year, partly because of the timing of weather-related catastrophe losses," said Sampson.

He added that expectations of a more severe hurricane season, which runs from June 1 to November 30, raised the possibility of greater insurance losses from storm damage.

In the first quarter, property-casualty insurers posted an overall loss on underwriting of $600 million, compared with an $8.3 billion net gain in the first quarter of 2007.

Investment results were also worse, declining to $12.2 billion from $15 billion a year ago.