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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 investment returns taking a beating, insurers on the whole reported some of their worst results in years. Through the first half, the property-casualty industry saw after-tax income drop 57.6 percent–from $32.7 billion in 2007 to $13.9 billion in 2008.

It didn’t help that high catastrophe losses and a stubbornly soft market left the industry with a first-half underwriting loss of over $5.6 billion–a $20.1 billion swing from the $14.5 billion underwriting gain last year. That pushed the industry’s combined ratio back over the magic 100 mark, up to 102.1–up almost 10 points from 2007.

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