P/C Combined Ratio Sees 10-Point Jump

P/C Combined Ratio Sees 10-Point Jump
Insurance Networking News

P/C Combined Ratio Sees 10-Point Jump
By Pat Speer March 30, 2009

Excerpts:

Although experts say the industry should see a leveling out of combined ratio increases by mid to late 2009, the sting of what occurred in 2008 is being felt industry-wide. The 10-point increase in the property/casualty industry’s combined ratio for 2008 seems yet another indicator of the trickle-down effect of the current economic downslide.

According to an A.M. Best Co. statistical study, the total industry registered a 104.7 combined ratio in 2008, compared with 95.1 in 2007. The combined ratio for the top 25 writers based on net premiums written rose to 102.3 in 2008 from a profitable 94.5 the prior year.

A.M.Best P&C financial analyst Ed Keane, points to catastrophes, losses from mortgage/financial guaranties and a general deterioration in rates. "Cat losses added 5.1 points to the overall combined ratio in 2008," Keane said. "In 2007, cat losses added about 1.5 points."

Overall insured property losses in 2008 were the fourth-highest within the last decade—approximately $25.2 billion, according to ISO's Property Claim Services Unit. A majority of the cat losses were caused by tropical storms and hurricanes—Ike, Gustav, Dolly, Fay, Hanna and Eduoard. Tornadoes and winter storms in the Midwest also added to cat losses in the industry

Read Full Article: http://www.insurancenetworking.com/news/combined_ratio_insurance_property_casualty_catastrophe_mortgage-12089-1.html

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This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.