Despite the tough economic times continuing to take their toll on the property/casualty industry, insurers are continuing to stand tall. A new report from ISO and the Property Casualty Insurers Association of America (PCI) finds that the overall decline in surplus and net losses notwithstanding, P&C insurers remain well capitalized and in good position to ride out the remainder of the storm.

First-quarter 2009 financial results show that private U.S. property/casualty insurers had $437.1 billion in policyholders’ surplus (or statutory net worth) on March 31, 2009. Insurers also had $554.4 billion in loss and loss adjustment expense reserves to cover the cost of settling claims that had already occurred, and another $201.5 billion in unearned premium reserves set aside to cover losses arising during the remaining term of policies in effect on March 31, bringing the total funds available to cover losses and other contingencies to just under $1.2 trillion. Key leverage ratios, such as the premium-to-surplus ratio, show that the property/casualty insurance industry remained well capitalized, though policyholders’ surplus fell $19 billion, or 4.2 percent, from $456.1 billion at year-end 2008.

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