US P/C SECTOR'S NINE-MONTH INCOME MORE THAN TRIPLES

The US p/c sector's net income for the first nine months of 2012 more than tripled to $26.98bn from $8.39bn, largely reflecting a decline in catastrophe-related losses to $16.7bn from $35.1bn, according to figures compiled by the Property Casualty Insurers Association of America (PCI) and Verisk Analytics ISO unit. With the drop in cat losses, the sector's net underwriting loss for the period fell to $6.68bn from $35.70bn on earned premiums of $335.31bn, up 3.4%, as its combined ratio improved to 100.9% from 109.8%. Net income for the nine months also reflected a $300m increase in miscellaneous other income to $2.1bn. Partially offsetting the improved underwriting result, net investment gains – including both earned investment income and capital gains – dropped 9.7% to $39.09bn. The sector's consolidated surplus rose 7.7% to a record $583.49bn. PCI senior vice-president Robert Gordon said that "results like those for 9mo 2012 provide insurers with the financial wherewithal necessary to absorb shock losses such as those inflicted by hurricane Sandy last October and continue to fulfill their commitments to policyholders". The record surplus at end-Q3 meant that "insurers have more than enough capital to cover losses" from Sandy, which are expected to top $20bn, "and satisfy the coverage needs of a growing economy", he said. However, ISO assistant vice-president Michael Murray noted that the sector's annualized rate of return for the nine months was 6.3%, well short of its 9% average rate of return over the last 53 years.