Low Premium Growth, Greater Losses Hurt Insurers
Tuesday, June 27th, 2000 Auto Liability Property Risk Management Workers' CompensationNear record-low growth in premiums, increased loss and loss- adjustment expenses, declining investment income and lower realized capital gains led to deterioration in the property/casualty industry’s net income after taxes and overall profitability last year, according to Insurance Services Office, Inc.’s (ISO) just-published “Insurer Financial Results: 1999” Insurance Issues Series study. The ISO study reported that the industry’s net income after taxes fell to $22.2 billion last year, down 28% from $30.8 billion in 1998. The industry’s rate of return on average net worth dropped to 6.4% in 1999 from 8.5% in 1998, measured under Generally Accepted Accounting Principles (GAAP). ISO estimates that the median GAAP return for Fortune 500 companies in 1999 was 16.5%, more than 10 points higher than both the rate of return for the property/casualty industry overall and the rate of return for large insurers.
