U.S. property/casualty insurers received a bit of a gust in their sails yesterday with reports of a strong fourth quarter of 2009.

Net income climbed to $31.1 billion in 2009, largely as a result of improved underwriting results, the continued recovery of the financial markets and disciplined capital management, according to A.M. Best.

P&C underwriting results were buoyed by a quiet hurricane season, significant reserve releases and a sizable reduction in underwriting losses in the mortgage and financial guaranty segments, the ratings agency said. Additionally, the P&C industry's improved investment returns were driven by a dramatic upturn in the financial markets in 2009.

A.M. Best noted that—for the first time in recorded history—net premiums written (NPW) have declined in three consecutive years. NPW fell approximately 5.9% to $419.3 billion in 2009.

The industry's combined ratio improved to 101.2 in 2009, down approximately 3.0 percentage points from 104.0 recorded in 2008. Also, A.M. Best said that overall net investment gains increased approximately 31% to $43.5 billion in 2009 from $33.1 billion in 2008, and that the industry recognized about $11.0 billion of favorable prior year loss reserve development in 2009.

Finally, A.M. best reported that U.S. P&C industry's policyholders' surplus position rebounded by about 9% to $519.3 billion in 2009 from $477.2 billion by the end of 2008.



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