P/C Industry Turns to Loss in First Quarter 2009
It was a rough year, but the property/casualty industry eked out a profit of $2.4 billion net after taxes in 2008, down from $60.1 billion in 2007, according to the Insurance Services Office. The downturn became an avalanche in the first quarter 2009 as the industry reported a $1.3 billion net loss after taxes – a $9.8 billion adverse swing from $8.5 billion net income in the first quarter 2008.
“Property/casualty insurers absorbed a pounding in first-quarter 2009, as the recession deepened and stock markets tumbled. Based on quarterly data extending back to 1986, insurers’ $1.3 billion net loss after taxes for the first three months of this year is the worst first-quarter result on record, said Michael Murray, ISO Assistant VP for Financial Analysis.
“The perfect storm that beset the industry in third quarter 2008 continued unabated in the fourth quarter, as the downturn in the economy gathered momentum and financial markets tumbled. Yet, aside from some problems in the mortgage and financial guaranty sector, the property/casualty insurance industry emerged intact,” he declared. Insurers’ net income in 2008 would have been the lowest in more than two decades if not for the net loss the industry suffered in 2001 when terrorists destroyed the World Trade Center.