The U.S. property and casualty industry's net income plunged nearly 80 percent -- to $14 billion -- in 2008, according to A.M. Best Co.
The worldwide insurance-rating and information agency cited deteriorating underwriting and investment results as drivers in the drop. Although policyholders' surplus decreased an estimated 10 percent in 2008, excess capital absorbed much of the decrease. As such, the overall industry is said to remain sufficiently capitalized to meet the current challenges in the underwriting and financial markets. A.M. Best notes that P&C insurers will likely recognize nearly $11 billion of favorable loss-reserve development in 2008, even higher than the $9 billion recorded in 2007.
Source: www.ambest.com
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