Sound risk management allowed U.S. property/casualty insurers to grow earnings to $43bn and boost capital to $427.1bn in 2005 despite record catastrophe losses, according to two industry trade groups.
The insurance industry's net income rose by 11.7% after tax to $43bn in 2005, from $38.5bn in 2004, according to the Insurance Services Office (ISO) and the Property Casualty Insurers Association of America.
The industry's consolidated surplus grew by 9.2% or $35.8 bn, to $427.1bn last year, compared with $391.3bn in the prior-year period, the groups said in a statement.
The figures—which are estimates for all private property/casualty insurers, rose despite an increase in direct insured property losses to a record $57.7bn as a result of catastrophes.
Michael R. Murray, assistant vp for financial analysis at ISO, said: "The insurance industry's financial results for 2005 attest to insurers' risk management and, in particular, their use of reinsurance to spread risk globally."
