According to AM Best, the aggregate combined ratio for US P&C carriers included in the study deteriorated by 1 point year-on-year to 97.4 percent.
AM Best reported the decline in earnings in its First Look P&C market report. The sector study examines data from approximately 2,000 companies that account for 97 percent of US P&C net premiums.
An 5.6 percent increase in losses and loss adjusting expenses outpaced the 3.8 percent growth in net earned earned premiums, leading to a weakening in the sector-wide combined ratio.
“We estimate that catastrophe losses accounted for 4.5 points on the six-month 2019 combined ratio, up from an estimated 4.2 points in the prior year period,” the ratings agency said.
A weakened industry-wide underwriting result over the six months was marginally offset by the performance of insurers’ asset portfolios. Net investment income among the companies assessed increased by 1.6 percent to $27.5bn, year on year.
Overall, first-half net income fell by 2.4 percent year on year to $32.7bn.
Surplus funds held by carriers included in the study increased by 8.2 percent to $803.5bn over the six-month period.
AM Best said this was driven by a $41.3bn change in unrealised gains and Federal Insurance Company, Hartford and National Indemnity paying $5.9bn less in stockholder dividends than the prior year.