The nation's 3,000 property-and-casualty insurers, including MBIA and Allstate, suffered a combined 53% decline in profits during the first half of 2008, dragged down by the first industry-wide underwriting loss in five years.
Insurers' earnings dropped to $16 billion in the six months through June 30 from $35 billion in the same period a year earlier. Losses in underwriting and investments delivered a double blow. The industry has been limping through a weak market for several quarters, and a rebound isn't expected for several more. First-half premium volume was down for the first time since 2005, decreasing to $220.5 billion from $221.3 billion because of depressed prices. Claims jumped by 13.6%, or $20 billion. Consequently, the industry booked a net loss on core underwriting of $5 billion, compared with a gain of $15.7 billion in the year-earlier period. On top of the extraordinary first-half underwriting loss, invested assets of all P&C insurers declined 14% to $27 billion from $32 billion. The value of the industry's $845 billion bond holdings increased 0.2%, the smallest gain since a decline in 2000. Likewise, common stock holdings slumped 5.8% to $326 billion from $346 billion. The table below includes the companies with the largest year-over-year net losses.![]() |
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