Property/casualty insurers in North America saw their operating income decline by double digits in the first half of 2016, as investment income plunged and catastrophe losses rose.

Fitch Ratings looked at 44 insurers and reinsurers that are either publicly traded or report GAAP consolidated results, determining that their aggregate operating earnings dropped by 10.8 percent over the period, landing at $21.6 billion.

“Maintaining or improving underwriting performance will be the key to generating adequate returns on capital going forward, Christopher Grimes, director at Fitch, said in prepared remarks.

Grimes added that this could be a challenge, however, “as competitive forces are promoting flat to declining insurance pricing in many market segments.”

Insurers/reinsurers aggregate group combined ratio also deteriorated, hitting 95.7 in H1, 1.5 points higher than the same period last year. Fitch said that personal insurance and reinsurance groups saw the worst deterioration due to higher catastrophe losses.

Catastrophe losses added nearly 5 percent to the overall group’s combined ration – that’s up from 3.4 percent during the first six months of 2015.

Meanwhile, investment income for the aggregate group declined by 6.8 percent to $21.9 billion. However, realized investment gains were about the same for H1 in 2016 versus the year before, at $2.4 billion.

Source: Fitch Ratings