Analysis of third-quarter financial data of 46 insurers and reinsurers covered by investment bank Keefe, Bruyette & Woods finds worsening underwriting results but also a glimmer of hope for the industry.

As expected, industry underwriting results took a hit in response to the series of catastrophe-driven loss that have defend 2011 thus far. In Q3, the average combined ratio of the insurers was 101.3 percent some 8 percentage points higher than in the same period a year ago. According to KBW, catastrophe losses which added 11.8 percent to the total combined ratio as opposed 4.6 percent a year ago. Yet catastrophes do tell the entire story. “Most troubling is that the underlying combined ratio, which excludes catastrophes and reserve releases, worsened to 95.2 percent from 93.5 percent in the year ago quarter,” the report states.

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