Financial results for the first nine months of 2016 show the property and casualty insurance industry was less successful when compared to the same period in 2015.

That is the finding of commentator Steven Weisbart, using data released by ISO, a Verisk Analytics company, and the Property Casualty Insurers Association.

In an update posted yesterday on the website of the New York-based Insurance Information Institute, he said: “Net written and net earned premiums grew, but more slowly; underwriting losses this year followed underwriting gains last year; and net investment gains were smaller this year than last, leading to profits of $31.8 billion compared to $44.1 billion for 2015’s first three quarters.

“Although these data do not include the fourth quarter of 2016, the final quarter is likely to brighten the picture, with claims from Hurricane Matthew and the typical fourth-quarter slowdown in premium growth yet to come.”

The 2015 figure was the highest since 2007, while last year’s nine-month total is close to the mean average of $28.8 billion.

Net written premiums for the period grew by 2.8 per cent, down from 4.1 per cent the previous year, but still a percentage point higher than the rate of inflation in the US.

Exposure growth and rate activity were the primary drivers of the premium growth.

Mr Weisbart said: “Some sectors did better than others. For example, 2016 is on pace to be the second year in a row of a near-record number of new cars purchased. And even if old cars are being replaced only one-for-one, the new cars represent higher value and possibly additional coverage.”

The combined effect of lower profits and a larger capital base than a year ago produced an overall 6.2 per cent rate of return on average surplus (profitability) in the first three quarters of 2016, down from 8.8 per cent in the first three quarters of 2015.

In summary, Mr Weisbart said: “The property and casualty insurance industry turned in a profitable performance in the first three quarters of 2015.

“Policyholders’ surplus hit an all-time record high. Despite rising catastrophe and non-cat losses, and persistently low interest rates, premium growth, while still modest, is now experiencing its longest sustained period of gains in a decade.”

He added: “Fundamentally, the P/C insurance industry remains quite strong financially, with capital adequacy ratios remaining high relative to long-term historical averages.”

Net earned premiums for the first nine months of 2016 were about $390.7 billion, with incurred losses totalling $279.9 billion.

The industry’s overall underwriting loss was $1.7 billion, even though the combined ratio was measured at 99.5 per cent — which would normally indicate an underwriting gain. The discrepancy come from the different bases of the three percentages that make up the combined ratio.