P&c net profits fall in 2008

The sharp deterioration in economic conditions and investment markets is putting more pressure on US property and casualty insurers than traditional competitive pressures, according to a new special report by rating agency, Fitch. Commenting on the p&c industry’s performance last year, noted flat or reduced premiums in many cases, poorer underwriting results due to weaker pricing and significantly higher catastrophe-related losses, particularly due to Hurricane Ike. However, the large majority of insurers in the sector still managed to report an underwriting profit for the year. But operating profits for the sector, declined considerably for the year. Fitch said that here, too, a number of market participants reported reasonable operating returns on capital. “ But when investment losses are considered, a larger percentage of insurers reported unfavorable returns or net losses, as well as declines in GAAP shareholders’ equity for the full year,” the agency noted.