Highline Data's first compilation of regulators' 2006 property-casualty insurance industry data reveals that insurers profited from an 8-point drop in the overall combined ratio last year.
According to initial, unconsolidated regulatory filings published online in Highline Data's Insurance Analyst PRO database, the net industry combined ratio for 2006 was roughly 92, compared with 100 in 2005.
Highline Data is the data affiliate of Highline Media, a company formed in 2003 to acquire The National Underwriter Company.
The 2006 combined ratio result is based on annual statement data filed with the National Association of Insurance Commissioners for 2,636 individual companies, or 95 percent of the companies expected to file for 2005.
According to Highline Data, the figure includes results for 99 of the top 100 filers (based on net earned premiums.)
Should the combined ratio hold up at this initial level once all companies have filed and results are tallied, it would mean there was almost no deterioration in underwriting results that occurred during the fourth quarter. The nine-month 2006 industry combined ratio was 91.5 on Dec. 27 last year, according to Insurance Services Offices, Jersey City, N.J.
It would also mean the industry beat most analysts' estimates of underwriting profits for 2006, even those published just a little over a month ago.
In a Feb. 2 Groundhog Forecast, the Insurance Information Institute reported an average combined ratio estimate of 93.2, with only four of 14 Wall Street analysts polled to compute the average estimating a combined ratio of 92 or better (lower) for 2006.
Highline also reported that net earned premiums grew by 5 percent to $435 billion from $413 billion. That was an improvement over the meager one-point jump registered in 2005. Premium figures for 2005, however, were distorted by a $6 billion reinsurance cession from American Reinsurance to its European parent, Munich Re. (See NU, July 17, 2005 for details.)
For 2006, Highline Data also reported that unconsolidated surplus grew 14 percent to $605 billion, and unconsolidated net income rose 49 percent to $73 billion from $49 billion in 2005.
A comparison of unconsolidated income and surplus figures (basically the sum of net income and surplus figures for 2006 and 2005 for all the individual insurance companies in the Highline database) gives an early indication of how overall industry figures changed last year.
However, the sum for the 2,636 companies reporting so far for 2006 is only a proxy for aggregate net income and surplus that will ultimately be reported for the industry. The true dollar figure for industry aggregate net income, for example, will take into account intercompany transactions and investments in affiliates, and so should be lower when it is ultimately reported by Highline Data in June.
In November 2006, Highline Media's data, magazine and professional publishing divisions were all acquired by Summit Business Media.
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