The US property and casualty insurance industry had its worst year ever last year as it recorded an after-tax loss for the first time, according to a new report by Fitch Ratings.
The unprecedented losses stemmed from the World Trade Centre events, as well as several natural catastrophes.
Fitch said it believes that "the combination of uncertain investment returns coupled with the poor operating performance in recent years puts the industry in a 'no choice' position that forces the industry to abandon the recent unsuccessful pricing and underwriting practices and should lead to improved underwriting performance for 2002.
"However, favourable pricing and underwriting trends will likely need to continue for several years in order for the industry to produce an operating result that corresponds to an adequate return on capital," it added.
On a more positive note the ratings agency said conditions are set for improved results in 2002 as the pricing environment continues to harden and policy conditions become more restrictive.
