NU Online News Service, May 26, 11:06 a.m. EDT
The economic plunge in 2008 more than halved the profits of the property and casualty insurance industry, according to data just released by the Internal Revenue Services.
The data shows that the profits of mutual P&C insurers dropped 60.8 percent in 2008, compared to 2007. The profits of stock companies dropped 36.8 percent, according to the data, and for the entire industry, profits dropped 56.7 percent.
Profits of agents and brokers dropped 38.5 percent, the data reveals.
The data is consistent with the results of the life industry, whose profits dropped 54.7 percent from 2007 to 2008.
The data is contained in the 2008 statistics of corporate tax returns recently published by the agency. Results for 2009 will not be available until next year, according to agency officials.
Profits plunged in 2008 for P&C insurers despite an increase in revenues, according to the IRS data.
The data shows that mutual P&C insurers had $229.6 billion in revenues in 2007 and $256.1 billion in revenues in 2008.
Stock P&C insurers had revenues of $688.3 billion in 2007, while 2008 revenues declined slightly to $670 billion.
The plunge in profits apparently related more to investment income and the value of investments than it did to actual operating results.
For agents and brokers, however, overall revenues declined. According to the data, 2007 revenues were $88.3 billion, while revenues for 2008 were $70 billion.
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