The U.S. property/casualty (P/C) industry’s net income improved significantly to $61.4 billion in 2018, a $25.2 billion increase from the prior year, aided by a reduction in catastrophe losses and an increase in net investment income. These preliminary results are detailed in a new Best’s Special Report, titled, “First Look: 2018 Property/Casualty Financial Results,” and the data is derived from companies’ 2018 annual statutory statements received as of Mar. 11, 2019, representing an estimated 96% of the total P/C industry’s net premiums written.


The report states that increases in premiums written and earned outpaced the increase in incurred losses and expenses, and as a result, the P/C industry’s combined ratio for 2018 improved 4.4 points to 99.3 from 103.7 in 2017.


AM Best estimates that catastrophe losses accounted for 5.9 points on the 2018 combined ratio, down from an estimated 10.1 points in the prior year. The improvement in net income and $6.2 billion in additional contributed capital was more than countered by a $99.7 billion decline in unrealized gains and $5.5 billion in additional stockholder dividends, resulting in industry surplus declining 0.6% to $741.0 billion from the end of 2017.