Insurers' Combined Ratio At 92

Highline Data's first compilation of regulators' 2006 property-casualty insurance industry results reveals that insurers profited from an eight-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 2006 net industry combined ratio was about 92, down from 100 in 2005.

The 2006 result is based on annual statement data filed with the National Association of Insurance Commissioners for 2,636 individual companies–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 results are tallied, it would mean almost no deterioration in underwriting results occurred during the fourth quarter. 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 estimating a combined ratio of 92 or better (lower) for 2006.

Highline Data also reported that net earned premiums grew by 5 percent to $435 billion. For 2006, Highline said unconsolidated surplus grew 14 percent to $605 billion, while unconsolidated net income rose 49 percent to $73 billion from $49 billion in 2005.

Highline Data is an affiliate of Highline Media, a company formed in 2003 to acquire The National Underwriter Company.