JUPITER, Fla.--Dramatic improvements in underwriting performance by the nation's property and casualty insurers led to the first underwriting gain in nearly seven years. The industry reported a $5.5 billion net underwriting gain in the first quarter of 2004, compared to the $1.1 billion loss reported during the same period a year ago, according to Weiss Ratings, Inc., the nation's leading independent provider of ratings and analyses of financial services companies, mutual funds, and stocks.
"The strong profitability is the result of several years of rate increases combined with stricter underwriting standards," said Melissa Gannon, vice president of Weiss Ratings, Inc. "There is a sense that the industry is trying to level out the swings in the business cycle by maintaining tighter underwriting standards going forward, rather than returning to the lax standards of the soft market. If this continues, premium rates should level off or even decline."
Property and casualty insurers also enjoyed a surge in net realized capital gains, earning $3.2 billion on the sale of investments in first quarter 2004, representing a 182.1 percent increase compared to the $1.1 billion reported during the same quarter in 2003. The performance in the market, coupled with insurers' solid underwriting performance, contributed to industry earnings of $13.6 billion, a $6.5 billion, or 91.5 percent, profit jump over the $7.1 billion earned in the first three months of 2003.
