P&C Insurers Hit by Credit Crisis, Storms

More than half the nation's property and casualty insurers suffered drops in profits in the first nine months of 2008, as major hurricanes and the subprime mortgage crisis ate at companies' bottom lines, a new analysis by TheStreet.com Ratings shows.

Profits of the nation's property and casualty insurers declined 86% to $7.5 billion during the first nine months of 2008 from $52.5 billion during the same period in 2007. Catastrophe losses were significant during the period, but unlike other times of high catastrophe losses the industry couldn't fall back on investment returns to compensate for the loss. This time, investment losses compounded the problem -- particularly for financial guarantors, which had to make payouts to companies hit by fallout from the credit crisis.

During the first nine months of the year, 1,802 companies reported declines in profits. TheStreet.com Ratings' quarterly review of nearly 3,000 property/casualty insurers encompasses all publicly traded and private insurers. ...