Investment declines and deteriorating accident-year underwriting results dropped U.S. property-casualty insurers' profits at the half-year mark, but negative impacts were partially offset by favorable prior years' loss reserve development, a rating firm said.
New York-based Fitch Ratings reported a number of insurers also experienced equity declines in the period, largely as a result of significant unrealized investment losses following equity market declines and widening credit spreads that caused unfavorable mark-to-market adjustments in insurers' and reinsurers' investment portfolios.
Net income for the group in the Fitch report "declined precipitously" to $1.8 billion from $33 billion in the first half last year. Most of the drop in profits was the result of investment losses of $17.6 billion, of which $12.2 billion was attributed to American International Group.
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