The US property/casualty industry's underwriting loss was $2.8bn for the first nine months of 2005, according to a recent study by AM Best.
The loss reverses the $3.4bn underwriting gain reported during the same period of 2004.
Excluding the catastrophe losses, $38.1bn of which was from Katrina, AM Best said core underwriting results were strong, as rate increases earned on policies written in prior periods positively impacted earnings.
Before Hurricane Katrina, rate decreases and competition on many lines began to emerge throughout the majority of 2005. However, following this event, the trend of rate declines reversed on some lines of business, particularly in those areas directly impacted by the hurricane.
While this rate environment will have a positive impact on future results, AM Best said it believes the retreat from rate decreases will be short-lived.
