Weiss: P-C Profits Up 28% For %2704

The U.S. property-casualty industry posted a 28 percent profit increase, or $9 billion, in 2004, despite dealing with the losses of four hurricanes in a single season over Florida, Weiss Ratings Inc., reported.

The Jupiter, Fla.-based rating service said p-c profits increased from $32.3 billion in 2003 to $41.3 billion last year.

Weiss said underwriting profits surged 121 percent, or $6.4 billion, going from $2.9 billion to $6.4 billion in 2004. According to the firm, the underwriting gain was due to an increase in earned premiums, which rose 6 percent, or $26.6 billion, from $387.7 billion to $414.3 billion.

Improved underwriting also contributed to a 12 percent increase, or $51.5 billion, in p-c industry capital and surplus, which rose from $444.8 billion to $496.3 billion.

The industry's combined ratio improved 1.9 points, from 100.1 in 2003 to 98.9 in 2004.

"Property and casualty insurers continue to post impressive results," said Melissa Gannon, vice president of Weiss, in a statement. "The ability to withstand such a horrific hurricane season is an indicator of the industry's long-term financial strength."

The five insurers Weiss noted reporting the largest net income gains were:

o Continental Casualty, in Chicago, rated "C" (weak), which went from a loss of $1.56 billion to $521 million in 2004.

o State Farm Mutual Auto Insurance of Bloomington, Ill., rated "B-plus" (good), which went from $1.47 billion in 2003 to $3.08 billion in 2004.

o State Farm Fire and Casualty of Bloomington, Ill., rated "B-minus" (good), going from $464 million to $2.03 billion.

o Allstate Insurance, based in Northbrook, Ill., rated "A-minus" (excellent), which went from $2.7 billion to $3.9 billion.

o Employers Reinsurance Co., based in Jefferson City, Mo., rated "C" (weak), going from a loss of $755 million in 2003 to a loss of $110 million in 2004.

Weiss said among the 2,534 p-c insurers it reviewed, 90 companies were upgraded while 87 faced downgrades.