The U.S. property/casualty industry's net income after taxes plunged 29.3% to $9 billion in the first quarter of 2011, driven primarily by an underwriting loss of $3.6 billion, attributable to an unusually high level of catastrophe-related losses and to a lesser extent, diminished reserve releases, notes a new report by AM Best. The agency reports that the industry’s statutory combined ratio was 102.3 in the three months ended March 31, 2011, up from 99.3 during the same prior year period, and the industry's investment performance was down. Still, balance sheets remained generally strong, and the industry's policyholders' surplus increased to a record $561.2 billion at March 31, 2011.

All three major segments—personal lines, commercial lines and U.S. reinsurance, reported a continued upward trend in net premiums written. Further, notes the report, underwriting results showed a modest profit in the personal lines segment, but the commercial lines and U.S. reinsurance segments both reported underwriting losses through the first quarter of the year.

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