SNL Data Shows P&C Insurers Report Slight Underwriting Gain in Third-Quarter 2009

Although reported losses fell 15.7% year-over-year, heightened declines in earned premiums written kept profitability modest.

Charlottesville, Va. (November 24, 2009) – A preliminary review by SNL Financial of third-quarter statutory financial data for U.S. property and casualty insurers found modest improvement in underwriting profitability and additional stabilization through realized and unrealized capital gains.

With data available for nearly 88% of expected P&C filers, the industry (excluding financial and mortgage guarantor companies) is on pace to report a $536.0 million underwriting gain in the third quarter, an encouraging sign when compared to the $7.7 billion loss the industry experienced during the same period in 2008. Losses and expenses totaled $93.7 million, down from $107.2 million in third-quarter 2008. The loss ratio, defined as losses and LAE (loss adjustment expense) to net premiums written, fell by nearly 9 percentage points to 71.7%.

“Fortunately for P&C insurers, there was no Hurricane Gustav or Ike this season,” said Jon Wright, director of the insurance group at SNL. “With the economy still weak and premiums written dropping off further, it was very fortunate that catastrophic losses were minimal. The soft market has to continue at this point with an industry seemingly flush with surplus capital.”

The combined ratio for third-quarter 2009 was 99.1% and realized capital gains topped $458.8 million, an improvement when compared to 107.4% and losses of $6.7 billion, respectively, for the year-ago period. However, overall profitability was tempered by a decline in net premiums earned, down 5.2% year-over-year.

SNL's statutory insurance data, available exclusively as part of SNL Unlimited service for Financial Institutions, includes detailed financial data on each filer, reinsurance, investment and loss reserve schedules, data by state and line of business and hundreds of ratios, snapshots and analytics. SNL is the only information provider to offer clients a comprehensive insurance product, linking statutory data with public company data, mergers & acquisitions data, proprietary news, documents and more. To find out more, contact sales@snl.com or call 866.296.3743.

About SNL Financial
SNL collects, standardizes and disseminates all relevant corporate, financial, market and M&A data – plus news and analysis – for the Banking, Financial Services, Insurance, Real Estate, Energy and Media & Communications industries. For more information, visit www.SNL.com.

Visit the SNL Press Room to learn more about resources available to members of the media.

SNL Contact
Monica Jenkins
Press Relations Manager
+1.434.951.6951
mjenkins@snl.com

SNL Financial
One SNL Plaza
Charlottesville, VA 22902
+1.434.977.1600

Other office locations:
Ahmedabad, India; Arlington, Va.; Boston, Mass.; Boulder, Colo.; Islamabad, Pakistan; Jersey City, N.J.; London; Monterey, Calif.; New York.