Wednesday, December 28, 2011

US Policyholder Surplus vs Combined Ratio at 2011 3Q

The graphic below updates the basic data for the U.S. P & C Industry through the end of the 3rd quarter, 2011.  While there have been no real dramatic changes from the end of the 2nd quarter, that in and of itself is noteworthy.  That is because the 3rd quarter is often a time of healing for the industry but this year that didn’t happen.  Most indicators have deteriorated a bit or remained about the same which is a direct reflection of the large amount of catastrophe losses of the last several months, the fact that investment returns continue at a reduced level and that reserve releases continue to drop from prior periods.  On the positive side premium growth has been positive, up 3.1% for the first 9 months of the year. Policyholders surplus has dropped some $20.5 billion, the combined ratio has remained about steady at 109.9% and while the premium to surplus ratio remains well below 1 to 1 at 0.8 to 1, that’s up from 0.78 to 1 as of June 30.  Will be most interesting to see what the yearend figures will look like.
- Jerry Sullivan

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