American International Group wasn't the only casualty of this year's financial market collapse, prompted by the meltdown in subprime mortgages and their related securities. Indeed, no insurance company was left unscathed.
With claims soaring and investment returns taking a beating, insurers on the whole reported some of their worst results in years. Through the first three quarters, the property-casualty industry saw net income drop 91.8 percent–from $49.6 billion in 2007 to just $4.1 billion this year.
High catastrophe losses and a stubbornly soft market left the industry with an underwriting loss of about $20 billion–a nearly $40 billion swing from last year's $18.4 billion underwriting gain. That pushed the industry's combined ratio back over the magic 100 mark–jumping 11.8 points, from 93.8 last year to 105.6 today.
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