These graphics present cash flow for U.S. Property & Casualty Insurers updated through the end of 3rd quarter, 2011. Very interesting results. Operations have generated a positive cash flow a bit below the quarterly average for the last 11 months, which is an improvement from the 1st and 2nd quarters of this year. Investments turned in a massive negative cash flow, almost 3 times the average of the last 11 quarters while cash from Financing dropped to a negative figure some 30% worse than the average of the last 11 quarters.
Thus net cash flow for the industry for the quarter, the really important measure to watch, dropped to a negative figure almost 8 times greater than the average for the last 11 quarters. For this entire period of time (2009 through 3rd quarter 2011) the industry has had a negative cash flow of almost $25.5 billion of which $16.5 billion occurred this last quarter. This will add significant pressure to change the market’s direction.
- Jerry Sullivan