SNL Financial released their initial compilation of Q2 statutory results for the U.S. P&C industry yesterday. Loss ratio numbers were in the low 70’s, demonstrating good pricing and underwriting decisions. The combined ratio for the quarter was right at 100% — surprising given that revenues have been decreasing and this lower revenue base makes the loss and expense ratios worse. Investment gains added to net income results at many companies as the rise in the markets benefitted badly battered portfolios.
The numbers also highlight the revenue challenges I wrote about last week. Direct written premium was down in Q2 by 2.76%, after falling in Q1 by 2.43%. Lower insurance values are coming through in the numbers and I expect Q3 and 4 to be even worse. Here’s raising a glass to underwriting discipline and betting on the markets to stay buoyant. (Don’t anyone mention hurricanes, either…).
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