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An historically challenging investing environment threatens to help send the U.S. property and casualty industry to a high-single-digits percentage decline in policyholders surplus on a year-over-year basis -- though not necessarily a net loss -- according to the findings from a preliminary analysis of SNL's statutory insurance data.
As of March 9, SNL released year-end 2008 data for more than 2,200 companies representing 78.9% of the expected number of P&C filers and 76% of the industry's year-end 2007 asset base. Although information for a few large filing entities remains outstanding, the trend lines that are emerging from the full-year results are unmistakable: capital and underwriting losses are mounting, top-line growth is difficult to come by, and surplus positions are eroding.
SNL's analysis of the P&C industry's preliminary results finds that companies were battered by the triple whammy of a 10 percentage point increase in the overall combined ratio, a slight decline in net premiums written and a surge in after-tax realized capital losses. The full-year combined ratio of the individual filing entities for which data is available amounted to 102.7%, up from 93.6% in 2007 for the same group of companies. The fourth-quarter combined ratio remained marginally profitable at 99%, but was higher by 1.2 percentage points from the year-earlier period. Full-year net premiums written declined by 0.8%, including a 2.4% pullback in the...