The Insurance Services Office reported that the property and casualty insurance sector lost $9.9 billion in the third quarter of 2008, compared to the $16.7 billion in profits earned during the same period in 2007.
The collapses of Washington Mutual and American International Group significantly impacted the market, according to Insurance Information Institute President Robert Hartwig. However, federal income taxes for the sector dropped to $5.1 billion from $15.5 billion.
Most of the decline experienced by the sector was related to the $19.9 billion in net underwriting losses during the first nine months of 2008. The mortgage and financial guaranty lines were the most impacted.
Investment gains for the industry also fell this year by more than 40 percent from $47.8 billion to $28.3 billion. Things likely won’t look up anytime soon, as the economic recession will likely place more pressure on the industry’s finances, according to National Underwriter.
