Private U.S. property and casualty insurers’ net income aftertaxes grew to $44 billion in the first nine months of 2015, from$37.8 billion in the same period in 2014, with insurers’ overallprofitability as measured by their rate of return on averagepolicyholders’ surplus growing to 8.8% from 7.6%, according to areport from Jersey City, N.J.-based ISO and Chicago-based Property Casualty InsurersAssociation of America (PCI).

Insurers’ combined ratio improved to 96.9% for the first ninemonths of 2015 from 97.7% in the same period of 2014. Net writtenpremium growth increased to 4.1% for the first nine months of 2015from 4% for same period in 2014. Net investment income increased to$34.8 billion for the period from $34.5 billion a year earlier, andrealized capital gains increased slightly to $8.9 billion from $8.8billion, resulting in $43.7 billion in net investment gains for thefirst nine months of 2015.

Related: P&C industry shows improved underwriting,higher net income during first half of 2015

“Insurers overall had another strong quarter. Surplus andpremium to surplus continue to hover near historic levels,underscoring insurers’ rock-solid financial foundation and abilityto serve consumers,” said Robert Gordon, PCI’s senior vicepresident for policy development and research. “However, premiumgrowth continues to be sluggish for commercial lines. Additionally,some industry statistics we’re monitoring indicate that thecombined ratio for personal auto insurance has worsened, driven byincreases in both accident severity and frequency.”

“In the first three quarters of 2015, insurers continued to facea difficult investment environment. Their annualized investmentyield was just 3.1%, significantly below long-term averages, andthat is unlikely to improve in the immediate future,” said BethFitzgerald, president of ISO Solutions. “To succeed today, it’scritical that insurers have the analytics and information they needto make the best possible underwriting decisions.”

Third-quarter results

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  • The property and casualty insurance industry’s consolidated netincome after taxes rose to $13.1 billion in the third quarter of2015, up from $11.8 billion in third quarter of 2014.
  • Property and casualty insurers’ annualized rate of return onaverage surplus increased to 7.8% in the third quarter from 7% ayear earlier.
  • Net written premiums rose $5.3 billion, or 4.1%, to $136billion in quarter from $130.7 billion in the same quarter of 2014.The industry’s combined ratio worsened to 95.7% in the thirdquarter from 95.5% in the third quarter 2014.

View the full report from ISO and PCI.

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