US Property Insurers' Earnings Rose in '05-Groups
NEW YORK, April 18 (Reuters) - U.S. property and casualty insurers boosted earnings and added to their capital in 2005 despite record catastrophe losses, said the Insurance Services Office and the Property Casualty Insurers Association of America. The insurance industry's net income after taxes rose 11.7 percent, or $4.5 billion, to $43 billion in 2005. in spite of disasters such as Hurricane Katrina, which alone cost the industry $38 billion.
Reflecting the industry's higher income, its surplus, or statutory net worth, increased 9.2 percent, or $35.8 billion, to $427.1 billion at year-end 2005, said the ISO, which monitors the industry, and the PCI, an industry group. Net income and surplus increased even though insured property losses due to catastrophes rose in 2005 to a record $57.7 billion - more than double the $27.5 billion in insured catastrophe losses in 2004, according to the ISO.
"Fortunately for both insurers and policyholders, last year's catastrophes occurred at a time when increasing investment yields and rising stock markets bolstered insurers' investment returns," said Gregory Heidrich, PCI's head of research.
Figures for catastrophe losses exclude those covered by the National Flood Insurance Program. The ISO noted that countrywide data masked significant problems in specific markets and locations.
These industry results are estimates for all private property and casualty insurers based on reports accounting for at least 96 percent of all business written by these insurers. Heidrich warned that the industry could be facing a $100 billion disaster. If a hurricane such as 1992's Andrew hit Miami, it could cause $120 billion of losses, based on current property values.
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