Property Insurance Sector Takes $800M Hit in Q1

A report from A.M. Best Co., Oldwick, N.J., found the property/casualty segment of the insurance business had an underwriting loss of approximately $800 million in the first quarter of 2009 in large part because of the significant losses reported by mortgage and financial guaranty insurers. The mortgage and financial guaranty segments reported an underwriting loss of $1.9 billion and posted a combined ratio of 220.8, adding approximately two percentage points to the P/C industry's combined ratio; this ratio is a measure of underwriting profitability. Historically, these businesses add less than one percentage point to the combined ratio. The Best report said although the mortgage insurance and financial guaranty business represent just 1% of P/C net premiums written in the first quarter, the poor performance hurt what was otherwise a profitable underwriting quarter. Still the first quarter 2009 results were an improvement of the first quarter 2008 results of a $3.3 billion loss and a combined ratio of 305.1.