U.S. property/casualty insurance companies’ net income rose by 58 per cent in the second quarter compared with the same period in 2012, according to an analysis released by Moody’s Investors Service. The positive earnings figures were driven by lower catastrophe losses during the period.
The Moody’s report stated that investment income for the group of property/casualty companies it rates grew by three per cent year-on-year. It went on to say that reserve releases decreased slightly, although they were “still providing meaningful earnings support.”
The rate environment largely remained stable, according to Moody’s. Most companies are still reporting what are described as healthy rate increases across all business lines. The report did note that some insurers are noting a slight slowdown in the pace of ratings increases, notably in the large account and commercial property segments of their business.
Moody’s said it expects commercial lines rate momentum to stay positive. It said it is not expecting significant changes during the rest of 2013 because interest rates remain low despite increases in the second quarter.
The level of releases is expected to continue to be slow. Moody’s did say that the sector’s prospects for “meaningful enhanced earnings generation is limited over time as plentiful capacity will continue to dampen the upwards trajectory of rates.”
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