A new report details how insurers fared from a standpoint of profits in 2011.
According to risk analytics company ISO, after taxes, private U.S. property insurance companies' income levels dropped to $8 billion in the first nine months of 2011, down from $27 billion during the same span of time in 2010. This indicates that profitability as measured by insurers' rate of return slipped from 6.8 percent to 1.9 percent.
The primary factor believed to have driven the low rate of return was a deterioration in underwriting results, according to the Property Casualty Insurers Association of America and ISO.
The sources indicate that the insufficient underwriting totals largely resulted from net losses and loss adjustment expenses from environmental catastrophes, which rose from $10.8 billion between January and September 2010 to $33.2 billion through the same nine-month period in 2011.
"Despite massive net losses on underwriting, insurers emerged from nine-months 2011 strong, well-capitalized, and capable of paying future claims," said Robert Gordon, PCI senior vice president for policy development and research.
That insurers remain profitable is something agents should remind their home insurance leads of if they're worried about whether their claims will be satisfied.