Private U.S. property casualty insurers’ net income after taxes rose to
$16.2 billion through nine-months 2009, partially recovering from the
91.2 percent decline to $4.4 billion through nine-months 2008 from
$49.6 billion through nine-months 2007.

Insurers’ overall profitability
as measured by their annualized rate of return on average
policyholders’ surplus (or statutory net worth) increased to 4.5
percent in the first nine months of 2009, having previously fallen to
1.2 percent in the first nine months of 2008 from 13.1 percent in the
first nine months of 2007.

Driving the increases in insurers’ net income and rate of
return, net losses on underwriting fell by $16.6 billion to $3.2
billion through nine-months 2009 from $19.8 billion through nine-months
2008, as claim costs (loss and loss adjustment expenses) dropped $26.5
billion, according to ISO and the Property Casualty Insurers
Association of America (PCI).

The industry’s
consolidated net income after taxes for third-quarter 2009 amounted to
$10.4 billion – a $20.2 billion swing from the industry’s $9.8 billion
net loss after taxes for third-quarter 2008. Reflecting the increase in
net income, property/casualty insurers’ annualized rate of return on
average surplus rose to 8.7 percent in third-quarter 2009 from negative
7.9 percent a year earlier.