It’s common knowledge that the life insurance industry has taken it on the chin since the start of the economic crisis, with
The top 100 property/casualty insurers in the United States closed 2008 with the lowest net income levels in seven years, while the top 100 life insurers suffered unprecedented capital losses, according a new study by
The Highline Data “2008 Top 100 Performance Monitor” revealed a 67.7% year-over-year drop in net income—from $48.8 billion to $15.8 billion—in 2008 across the industry's top property/casualty insurers. The last time property/casualty insurers reported annual net income drops this significant was in 2001 due to the losses from the September 11 attacks and multiple hurricanes.
Highline Data also highlighted a decline in unrealized capital gains/(losses) among the top 100 life insurers, from a gain in 2007 of $1.4 billion to a loss of $51.7 billion as of Dec. 31, 2008. Sharp drops drove this year-over-year decline in the life industry in stock values. Capital paid-in, however, held the surplus decline to 4.7%.
Additionally, the “Performance Monitor” found other alarming signs for the insurance industry going into 2009, including declines in surplus of 11.3% for P&C companies, and 4.7% for life insurers. Property/casualty companies also experienced a combined ratio increase from 94% in 2007 to 102% in 2008, whereas life companies reported a return on equity of -0.3% in 2008, which was a decline from 12.8% in 2007.
