Weiss Says P-C Insurers' Profits Double
NU Online News Service, July 14, 4:26 p.m. EDT?Property-casualty insurers more than doubled their profits during 2003, earning $32.3 billion compared to the $13.5 billion reported in 2002, according to Weiss Ratings Inc.[@@]
Among those reporting the largest year-over-year increase in income were:
? State Farm Mutual Automobile Insurance Co., based in Bloomington, Ill., reporting an increase of more than $3.4 billion.
? American Re-Insurance Co., of Princeton, N.J., reporting an increase of less than $2.2 billion.
? Columbia Insurance Co., based in Omaha, Neb., reporting an increase of less than $1.4 billion.
? Novato, Calif.-based Fireman's Fund Insurance Co., and Allstate Insurance Co., based in Northbrook, Ill., both reporting increases of less than $1.3 billion.
Continued improvement in underwriting was responsible for p-c insurers' performance, Weiss said, as the industry dramatically reduced its underwriting loss to $2.9 billion in 2003, compared to the $28.2 billion loss reported in 2002.
"Escalating premiums have caused profits to soar, but improved underwriting performance is paramount to the industry's long-term financial strength," said Melissa Gannon, vice president of the Jupiter, Fla.-based Weiss Ratings, in a statement.
A strong performance by the stock market helped boost p-c insurers' investment portfolios, which reported a net investment gain of $47.8 billion compared to $46.4 in 2002. One component of the net investment gain, net realized capital gains, jumped 103 percent, as the industry reported earning $6.3 billion on the sale of investments in 2003 compared to only $3.1 billion in 2002.
Likewise, the rise in the equity market produced a $34.5 billion net change in unrealized gains for the industry, which contributed to a $71.6 billion, or 19.2 percent, increase in capital and surplus, from $373.2 billion at the end of 2002 to $444.8 billion at the end of 2003.
Insurers reporting the largest rise in capital and surplus were:
? State Farm, which increased its capital and surplus by $8.4 billion.
? National Indemnity Co. of Omaha, Neb., which increased by $7.4 billion.
? Allstate Insurance, up $2.3 billion.
? Columbia Insurance Company of Omaha, Neb., up $2.2 billion.
? Liberty Mutual Insurance Co. of Boston, Mass., which increased by $2.1 billion.
Among the 2,480 p-c insurers Weiss reviewed during the year, 126 companies received upgrades while 107 were downgraded.
Additional information is available at www.weissratings.com.
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