The P/C industry is reporting a 117.7 combined ratio for Q2, SNL Financial reports (sub. req., I think). That’s the worst result since third and fourth quarters of 2001, when the industry booked 121 and 120, respectively.
The second-quarter combined ratio easily topped that of other problematic periods for the industry in recent years. The same group of companies produced combined ratios of 112.7% in the third quarter of 2008 [ed. note: Hurricane Ike] and 113.6% in the third quarter of 2005 [Katrina], but the former was inflated by dismal results by bond insurers and the latter was suppressed to a lesser extent by strong bond insurer results.
The industry’s underwriting loss approached $19B. State Farm alone booked an underwriting loss of $2.5B. Clearly the awful tornado season took its toll.
SNL’s chart tells the story:
- Personal lines writers suffered $10B in underwriting losses.
- Commercial property writers posted $3.7B in underwriting losses.
- Companies that focus more broadly on all commercial coverages posted underwriting losses of $2.8B.
- Financial writers, led by poor results at mortgage writers, booked $1.4B in underwriting losses.
- Medmal writers posted a modest $161M gain.
SNL’s analysis is based on statutory data and represents 98% of expected statutory filers.