A look at first-quarter results of the 50 largest U.S. insurers shows the industry may be starting to see the benefits of price increases the last two years.

ALIRT Insurance Research's P&C Composite shows a first-quarter accident-year combined ratio of 99.4, compared to 103.4 for the same period in 2012.

ALIRT reports this is the best result since the first quarter of 2007, when sizeable reserve releases from the previous hard-market cycle were benefitting results. Current results partly reflect the lack of large catastrophe losses, as well as comtinued improved pricing during the first three months of 2013.

For instance, it looks as if rate increases in personal auto were needed, as loss ratios are at levels not seen since 2002—after the last soft market. Loss ratio in workers' compensation, another line where insurers have sought rate increases, have eased substantially, says ALIRT.

Companies continue to release reserves, improving underwriting results.

A combined ratio of below 100 was reported by 34 of the composite companies during the first quarter, says ALIRT. Fourteen of these companies had first-quarter combined ratios below 90.

“The majority of insurers that reported an underwriting profit in the current-year period benefited from prior-year reserve releases, some of which were substantial,” says the research firm of Windsor, Conn.

Leading the way in the first quarter were Factory Mutual, with a 58.8 combined ratio; Berkley Insurance, with 76.6; Pacific Indemnity (Chubb), with 81.2; Federal Insurance (Chubb), with 83.5; and State Farm Fire & Casualty, with 82.1.

Personal lines carriers accounted for 93 percent of current accident-year reserve releases—possible because they over-reserved after Superstorm Sandy and now feel comfortable letting go.

Special Reports /

ALIRT P&C Composite: Q1 Accident-Year Combined Ratio Best Since '07

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