U.S. Reinsurers See Better Underwriting Results, Higher Profits in Q2

A group of 19 U.S. reinsurers saw its second-quarter net income rise by over $2 billion and saw its combined ratio fall under 100 in 2012 compared to the same period a year ago.

The reinsurers, belonging to the Reinsurance Association of America, posted a combined 2012 second-quarter net income of $3.7 billion, up from $1.65 billion a year ago. Just three of the companies posted net losses for the quarter, an improvement from seven companies in 2011’s second quarter.

Last year, all but two of the companies posted underwriting losses, leading to a combined ratio of 116.2 fro the group. This year, 7 of the 19 companies posted underwriting losses, and the combined ratio fell to 91.5.

National Indemnity led the way for the group by a large margin, posting a net income of $2.3 billion in the quarter. Everest Re finished the quarter closest with a net income of $262.7 million. General Reinsurance Group (net income of $250.6 million), TRC/Fair American Insurance and Reinsurance Company ($187.6 million) and Swiss Reinsurance America Corp. ($153.1 million) rounded out the top five. Fair American was formally known as Putnam Reinsurance Company.

As noted in quarterly conference calls and in a number if industry analyses, the property and casualty insurance industry in general is benefitting in 2012 from a year that has seen a welcome decline in catastrophe losses.

Moody’s Investors Service said recently that Q2 net income for 26 property and casualty companies it follows was up 343 percent compared to last year, due largely to reduced catastrophe activity. Still, Moody’s noted that while catastrophes in the quarter were not on the same level as 2011, they were still above the 10-year average.