P & C profitability in United States best since 1953

The last time U.S. property and casualty insurers posted underwriting profitability of the scale witnessed in 2006, Jonas Salk unveiled his polio vaccine in 1953 and Sir Edmund Hillary became the first man to successfully climb Mount Everest, according to a recent statistical report by A.M. Best. The U.S. property casualty insurance industry posted US$$23.7 billion of underwriting income through the first nine months of 2006, the A.M. Best report notes.During this period, U.S. property and casualty insurers recorded a combined ratio of 91.9% — a marked improvement over the 100.1% COR it posted in 2005, according to the study.”The 2006 results have been driven by a relatively mild hurricane season, continued adherence to underwriting discipline, and favorable prior-year reserve development and loss frequency trends,” according to Ed Keane, a financial analyst with A.M. Best’s property/casualty division and author of the report. Given current market conditions, A.M. Best projects the U.S. property and casualty industry could record a full-year combined ratio of approximately 93.3%, the best the 93.1% ratio the industry posted in 1953.The 2006 results mark only the second industry-wide underwriting profit since 1978.