Insurance Company Earnings Plunge 53%

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. ...