Insurance Information Institute: P/C Insurers Remained Profitable in 2020's First-Half Despite Challenges

NEW YORK, Oct. 30 (TNSRes) -- The Insurance Information Institute issued the following news release:

The U.S.'s property/casualty (P/C) insurers turned in a profitable performance in 2020's first-half even as the industry's net income dropped 26 percent compared to 2019's first-half, according to Dr. Steven Weisbart, Chief Economist, Insurance Information Institute (Triple-I).

"The first half of 2020 was by most measures financially successful for insurers writing P/C insurance. Two measures of the industry's health--revenue and capital--rose in the first half of 2020," Dr. Weisbart observed, in a commentary he wrote following the release of a report this week by Verisk and the American Property Casualty Insurance Association (APCIA). P/C insurers write auto, home, and business insurance coverage.

Net income after taxes for P/C insurers was $24.3 billion in the first half of 2020 whereas this same figure stood at $32.8 billion in the first half of 2019. Contributing to that drop was $1.4 billion in realized capital losses on insurer investments in 2020's first half, a swing from $4.3 billion in realized capital gains a year earlier, Verisk and APCIA found.

The uncertainty within insurance and capital markets due to COVID-19 could be seen in a number of ways, Dr. Weisbart's commentary noted, as catastrophe-related claim payouts grew in 2020's first-half, U.S. auto insurers offered to their policyholders pandemic-related premium relief, and the policyholders' surplus dropped to $772 billion at the end of 2020's first quarter before rebounding to $826 billion at the end of 2020's first half. The policyholders' surplus is the amount of money remaining after the insurance industry's cumulative liabilities are subtracted from its assets.