The mortgage crisis that undermined big banks on Wall Street also slashed profits in the property and casualty insurance business in 2008. But property insurers still made profits last year, according to a recently published report.
The Insurance Information Institute (III) and the Property and Casualty Insurance Association of America pointed to full-year results from 2008 as evidence the industry remains well capitalized, in spite of financial turmoil in the markets.
Property and casualty insurers earned $2.4 billion in net income after taxes, with profits from property insurance, including commercial and homeowners insurance, down dramatically from 2007, III said.
The property/casualty insurance industry's $2.4 billion in net income was down 96.2 percent, from $62.5 billion in 2007. Because of the mortgage crisis, mortgage guaranty insurers lost considerably more than other property insurers.
Insurers' net income in 2008 would have been the lowest in more than two decades if not for the net loss the industry suffered in 2001 due to the terrorist attacks on the World Trade Center, III said.
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Posted: April 29, 2009
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