1、 2018 National Association of Insurance Commissioners 1 U.S. Property and Casualty Insurance Industry | 2017 Full Year Results U.S. Property NM = Not Material *In 2008, Other Liability Includes Occurrence and Claims-Made 2018 National Association of Insurance Commissioners 8 U.S. Property and Casual

2、ty Insurance Industry | 2017 Full Year Results Investment Operations Investment returns were $68.8 billion, 26.7% higher YoY compared to $54.3 billion in 2016. The improvement was primarily associated with a 126.8% YoY increase in realized capital gains to $19.8 billion, primarily due to gains on un

3、affiliated common stocks. Net investment income increased 7.5% YoY to $48.9 billion with the ma- jority derived from unaffiliated bonds. The industry av- erage investment yield improved slightly in 2017 to 3.08%, following a steady decline over the past 11 years. Net Income Ultimately, the investmen

4、t returns offset the deteriora- tion in underwriting performance resulting in a net profit of $38.7 billion, a 9.7% deterioration compared to prior years profit of $42.9 billion. Return on revenuea measure of net income to net premiums earned, net investment income earned, and realized capital gains

5、 (losses)was slightly lower at 6.3% versus 7.3% for the prior year and has declined for four consecutive years due, in large part, to deteriorating underwriting results. Capital and Surplus Policyholders surplus (adjusted for affiliated invest- ments) increased 7.0% to another new high of $785.6 bil

6、lion at December 31, 2017. The increase was primari- ly attributable to net income and unrealized capital gains of $40.3 billion that were offset, in part, by divi- dends to stockholders of $34.6 billion and a $22.8 bil- lion decrease in the net deferred tax assets related to the recent tax act. Ret

7、urn on surplusa measure of net income to average policyholders surpluswas 5.1% for the year, down 0.9-percentage points from 6.0% rec- orded in the prior year and 5.6-perentage points lower compared to five years ago. Cash difficulty in identifying the source of contamination; number of in- sureds a

8、nd/or identifying insureds with potential exposure is unknown; and the often high costs to resolve claims. Moreover, recent research reports have indicated that more diseases are being associated with asbestos exposure than before, which is also contributing to the uncertainty over insurers ultimate

9、 loss obligations. Despite the uncer- tainty, net asbestos-related reserves decreased 1.6% YoY to $16.8 billion at December 31, 2017, continuing a seven- year slide. However, during the year, 27 of the top 30 insurers in terms of net asbestos-related reserves, reported an increase in net incurred lo

10、sses. Overall, net incurred losses totaled $1.7 billion in 2017, representing a 14.1% increase over the prior year total of $1.5 billion. With respect to net claim payments, the industry saw a 40.2% drop to $1.8 billion versus $3.0 billion a year ago. As a result, there was a slight improvement in t

11、he three-year average survival ratio to 6.6 years from 6.3 years, but remains far below the 10-year high of 10.5 years at year-end 2013. Environmental In regard to environmental reserves, after two consecutive years of increases, net reserves decreased 2.5% YoY to $4.6 billion at December 31, 2017,

12、as net claim payments totaling $751 million exceeded net incurred losses totaling $636 million. Compared to ten years ago, net environmental reserves have decreased by 20%. The three-year average survival ratio for environmental-related reserves fell to 6.7 years from 7.1 years last year. 2018 Natio

13、nal Association of Insurance Commissioners 11 U.S. Property and Casualty Insurance Industry | 2017 Full Year Results The professional reinsurance market includes reinsurers that collectively comprised the top 75% of the industrys un- affiliated assumptions. In 2017, 29 reinsurers represented this ma

14、rket. Assumed premiums written in 2017 totaled $487.7 billion for the overall industry, of which $49.5 billion were unaffiliated assumptions with $37.3 billion assumed by the 29 professional reinsurers. As seen in the above table, the professional reinsurance market experienced a net underwriting lo

15、ss of $7.9 billion in 2017, accounting for 35.2% of the overall industry underwriting loss, as the reinsur- ance market absorbed a significant portion of the losses from catastrophe events. The combined ratio was sharply worse at 108.7% for 2017 compared to 98.6% a year ago, entirely due to the rise

16、 in incurred losses that drove the loss ratio higher to 81.9%. The 2017 underwriting loss was offset by a net investment profit of $15.5 billion, resulting in a net profit of $1.1 billion. Like the overall industry, return on revenue has sharply worsened over the last five years, from 30.8% in 2013

17、to 1.2% in 2017. Professional Reinsurance Market Professional Reinsurers Financial Snapshot 2000008 Unaffiliated APW 37,342 36,487 36,432 35,869 34,514 35,883 35,028 30,944 33,227 33,846 Net Premiums Written 78,930 73,687 78,029 86,744 64,407 55,497 51,266 48,508 47,

18、184 58,804 Net Premiums Earned 73,471 72,117 75,213 82,367 60,604 54,927 50,030 48,428 45,180 59,727 Net Losses Incurred 52,949 43,799 42,049 47,613 30,774 36,730 36,334 29,849 26,955 39,677 Loss Expenses Incurred 7,197 6,953 7,815 8,903 6,009 5,916 5,078 6,394 4,972 5,904 Underwriting Expenses 21,1

19、96 20,816 21,631 21,801 19,205 15,688 14,092 13,471 12,935 15,706 Underwrting Gain (Loss) (7,867) 528 3,697 4,096 4,619 (3,405) (5,499) (1,136) 347 (1,573) Net Loss Ratio 81.9% 70.4% 66.3% 68.6% 60.7% 77.6% 82.8% 74.8% 70.7% 76.3% Expense Ratio 26.9% 28.2% 27.7% 25.1% 29.8% 28.3% 27.5% 27.8% 27.4% 2

20、6.7% Combined Ratio 108.7% 98.6% 94.1% 93.8% 90.6% 106.0% 110.3% 102.7% 98.1% 103.1% Net Invmnt. Inc. Earned 12,587 11,794 13,087 19,503 15,699 13,846 12,620 14,105 10,782 12,080 Net Realized Gains (Loss) 2,875 2,443 2,142 3,219 10,081 521 1,807 3,013 (1,863) (1,978) Net Invmnt. Gain (Loss) 15,462 1

21、4,237 15,229 22,722 25,780 14,368 14,427 17,118 8,919 10,102 Investment Profit Ratio 21.0% 19.7% 20.2% 27.6% 42.5% 26.2% 28.8% 35.3% 19.7% 16.9% Net Income 1,055 13,283 16,010 21,120 26,625 9,617 8,169 14,124 7,302 5,967 Return on Revenue1.2% 15.4% 17.7% 20.1% 30.8% 13.9% 12.7% 21.5% 13.5% 8.5% (in

22、millions, except for percent data) For the year ended December 31, - $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 Reins-Nonpro Assumed Property Reins-Nonpro Assumed Liability Other Liability (Occurrence) HomePrvt Psgr Auto Liab Allied Lines FireWorkers Comp Other Liability (Claims Made) Unaffiliated

23、Assumptions by Largest Lines of Business ($M) 20172016 2018 National Association of Insurance Commissioners 12 U.S. Property and Casualty Insurance Industry | 2017 Full Year Results Title Industry Premium Title premiums are produced almost entirely on a direct basis, either through direct operations

24、 or agency operations (mostly non-affiliated with 62.8% of total DPW). Direct premiums written increased 3.4% YoY to $14.6 billion in 2017 and have increased in three consecutive years. According to the U.S. Census Bureau and the U.S. Department of Hous- ing and Urban Development February 2018 Stati

25、stics, new home sales were nearly flat at 0.5% above new home sales in 2016. Nearly half of direct writings were concentrated in five states, TX, CA, FL, NY, and PA, which represented 47.4% of total DPW. With less than 1% reinsurance utilized in the industry, net writings totaled $14.6 billion and n

26、et retention was 99.6%. The net writings leverage ratio rose 9-percentage points YoY to 303.4%. Profitability For the sixth consecutive year, a net operating gain was recorded in the title industry with a gain of $885 million in 2017, a 1.6% increase compared to prior years gain of $871 million. The

27、 increase was due to a 4.6% rise in total oper- ating income to $15.6 billion (primarily due to title insurance premiums earned), while total operating expenses rose 4.8% to $14.7 billion (due to a 5.5% increase in operating expenses). The combined ratio was 100.8% for the year, rep- resenting a 1.3

28、-percentage point deterioration from the prior year, represented by a 4.3% loss ratio and a 96.4% ex- pense ratio. A net investment gain of $489.3 million was reported for the year, up 11.9% compared to a gain of $437.5 million in the prior year and was comprised of net investment income earned of $

29、347.8 million and net realized gains of $141.5 million. Ultimately, the industry reported a 5.8% or $55.4 million YoY increase in net income to $1.0 billion compared with net income of $960.9 million in 2016. U.S. Title Insurance Industry Results(in millions, except for percent data) YoY Chg20172016

30、20000920082007 Net Premiums Written 3.4%$14,617 $14,133 $12,964 $11,156 $12,569 $11,246$9,249$9,438$9,286$9,916 $14,054 Title Premiums Earned3.5%$14,461 $13,976 $12,787 $11,389 $12,490 $11,233$9,364$9,403$9,468 $10,226 $13,857 Loss & LAE Incurred(8.5%)$629$687$672$742$825$851$1

31、,102$1,105$1,024$1,316$1,297 Operating Exp. Incurred5.5%$14,089 $13,357 $12,163 $10,659 $11,919 $10,881$9,300$9,597$9,693 $10,226 $14,015 Net Operating Gain/(Loss)1.6%$885$871$831$799$686$498($22)($214)($133)($714)($97) Net Loss Ratio(0.6) pts4.3%4.9%5.3%6.5%6.6%7.6%11.8%11.8%10.8%12.9%9.4% Expense

32、Ratio1.8 pts96.4%94.6%93.9%95.7%94.8%96.7% 100.9% 101.7% 104.4% 108.2%99.7% Combined Ratio1.3 pts100.8%99.5%99.1% 102.2% 101.5% 104.3% 112.7% 113.4% 115.2% 121.1% 109.1% Net Invmnt. Inc. Earned25.9%$348$276$326$261$274$321$346$334$517$406$556 Net Realized Gains (Loss)(12.7%)$142$162$9$1$26$36$34($80

33、)($50)($178)($25) Net Invmnt. Gain (Loss)11.9%$489$437$336$262$299$356$380$254$467$227$531 Net Income5.8%$1,016$961$871$855$769$719$309$31$351(407)$313 Net Cash From Ops10.4%$1,193$1,081$1,039$698$706$844$167$202$188(383)$709 Liquidity Ratio(2.7) pts67.9%70.6%70.4%73.3%76.1%81.7%96.3%98.3% 102.6% 11

34、1.5%98.9% December 31,YoY Chg20000082007 Policyholders Surplus0.4%$4,818$4,800$4,357$4,251$4,122$3,842$2,950$2,984$3,201$2,731$3,129 For the year ended December 31, 2018 National Association of Insurance Commissioners 13 U.S. Property and Casualty Insurance Industry

35、| 2017 Full Year Results Capital & Surplus Industry aggregated policyholders surplus was nearly flat at $4.8 billion at December 31, 2017. The $18.1 million in- crease was mainly driven by net income of $1.0 billion, a $156.1 million change in accounting principles (resulted from a reduction in stat

36、utory premium reserve by three insurers), and $111.8 million net unrealized capital gain, partly off- set by dividends to stockholders of $1.2 billion. Return on surplusa measure of net income to average policyholders surpluswas flat at 21.1% on the year. Cash & Liquidity Net cash from operations to

37、taled $1.2 billion for 2017, which represented a 10.4% or $112.6 million increase com- pared to 2016 cash of $1.1 billion. The improvement was due to a 5.2% or $793.2 million increase in cash inflows to $16.1 billion that primarily resulted from a 3.7% rise in premiums collected. Cash outflows incre

38、ased 4.8% or $680.6 million to $14.9 billion due to a 5.4% increase in commissions and expenses paid. Net cash from investing activities totaled $33.3 million, as total investment proceeds increased 27.0% to $2.3 billion and total investments acquired increased 7.4% to $2.2 billion. Cash used by fin

39、ancing and miscellaneous sources amounted to $1.2 billion, the majority of which were related to stockholder dividends. Overall, cash, cash equivalents, and short-term investments increased $25.1 million. The industrys liquidity ratio improved 2.7-percentage points to 67.9%, as adjusted liabilities

40、dropped 1.1% to $5.4 billion and liquid assets rose 2.9% to $7.9 billion. Financial Regulatory Services Division Financial Analysis and Examinations Department Contributors: Brian Briggs, Financial Analyst II Erika Cosey, Financial Analyst Bree Wilson, Sr. Financial Analyst Contacts: Bruce Jenson, S

41、r. Manager II Solvency Monitoring BJensonnaic.org 816.783.8348 Andy Daleo, Sr. Financial Analysis Manager ADaleonaic.org 816.783.8141 Rodney Good, P&C and Title Financial Analysis Manager RGoodnaic.org 816.783.8430 DISCLAIMER: The NAIC 2017 Annual Report on the U.S. Property & Casualty and Title Ins

42、urance Industries is a limited scope analy- sis based on the aggregated information filed to the NAICs Financial Data Repository as of December 31, 2017, and written by the Financial Regulatory Services Department staff. This report does not constitute the official opinion or views of the NAIC member- ship or any particular state insurance department.