NU Online News Service, July 22, 11:28 a.m. EDT

A report from an insurance marketing and risk managementconsulting firm observed that, save for the mortgage and financialguaranty market, first-quarter earnings for the property andcasualty industry weren't as bleak as expected.

Garden City, N.Y.-based CR Marketing Strategies examined thefinancial results released by the Insurance Services Office withthe mortgage and financial guaranty results removed.

The mortgage and financial guaranty market is dominated by onlya select few participants who have had little impact on the p&cdata until recently, CR said.

The first-quarter underwriting loss of $2.5 billion became a$1.7 billion underwriting profit with the outlying mortgage andfinancial guaranty results removed, CR stated.

Net income after tax went from a $1.3 billion loss to a $2.4billion profit without the outlying results, according to CR.

The combined ratio dropped from 102.2 to 98.4 without includingthe mortgage and financial guaranty data, CR said.

However, CR reported that investment gains for the p&cindustry, which normally help the industry during soft underwritingcycles, have dropped due to declining interest rates and thecollapse of financial and credit markets.

The industry surplus has dropped from $456 billion at the end of2008 to $437 million at the end of the first quarter of 2009, whilecapital losses have amounted to $24 billion in the firstquarter.