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

A report from an insurance marketing and risk management consulting firm observed that, save for the mortgage and financial guaranty market, first-quarter earnings for the property and casualty industry weren't as bleak as expected.

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

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

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

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

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

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

The industry surplus has dropped from $456 billion at the end of 2008 to $437 million at the end of the first quarter of 2009, while capital losses have amounted to $24 billion in the first quarter.

Special Reports /

P&C Results Seen As &#039;Less Bleak&#039; On Second Look

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