The U.S. reinsurance industry's combined ratio deteriorated by nearly five points in the first quarter compared to last year, according to the Reinsurance Association of America.

A survey of 24 U.S. reinsurers found a 98.4 combined ratio, compared with 93.9 for the first three months of 2005 for a like group of carriers.

Net written premium declined about 6 percent for the quarter, coming in at $6.6 billion. The drop did not come as a surprise to analysts, who have seen reinsurers grow wary of taking on too much aggregate catastrophe risk in the aftermath of 2005's record hurricane losses.

Bear Stearns analyst David Small said that despite rising property insurance prices, many carriers appear either unwilling or unable to exploit such opportunities, with notable exceptions such as Everest Re and Renaissance Re.

Further upward pressure on reinsurance prices this quarter could come from the release of new hurricane models forecasting greater insured losses, wrote Morgan Stanley analyst William Wilt. Moreover, large national accounts such as Allstate, which announced last year a $2 billion increase in secondary coverage, will soak up capacity, he added.

Reinsurers posted higher pretax income of $1.9 billion, compared with $1.5 billion in the first three months of last year. Net investment income also rose to $1.4 billion in the quarter from $1.2 billion.

Special Reports /

U.S. Reinsurer Results Mixed For First Quarter

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