The U.S. property/casualty insurance industry’s net underwriting income has so far swung from a massive loss in 2017 to substantial profit, according to a new A.M. Best report.

Carriers booked $3.5 billion in net underwriting income for the first nine months of 2018, A.M. Best said, versus a $21.2 billion underwriting loss over the same year-ago period. A.M. Best based its conclusion on companies’ nine-month 2018 interim statutory statements received as of Nov. 19, 2018. The data also covers 97 percent of total P/C industry net premiums written, the ratings agency said.

What drove the growth? A number of factors helped, including a jump in net premiums written of 11.3 percent versus the same period last year, plus flat loss and loss adjustment expenses, A.M. Best said. Premium increases also outpaced the growth in incurred losses and expenses, and the combined ratio improved by nearly seven points compared to the same period in 2017.

The biggest factor in the U.S. P/C industry’s improved underwriting income: Catastrophe losses were at more normal rates in the first nine months of 2018, accounting for 5.1 points of the nine-month 2018 combined ratio. They took up 9.9 points over the same period in 2017, A.M. Best said.

Net investment income also helped shape the U.S. P/C industry’s nine-month 2018 results, jumping $6.2 billion compared to the same period a year ago.

Net industry income hit $49.1 billion for the first nine months of 2018, up $27.1 billion compared to the year-ago period.

The full report is “A.M. Best First Look – Nine-Month 2018 Property/Casualty Financial Results.”

Source: A.M. Best