The U.S. property and casualty (P/C) insurance industry remains strong despite the global financial crisis that has impacted many companies since 2008. Although the industry has suffered from sharp declines in asset values, its capital position has proved sufficient to weather the crisis. Declines in net underwriting losses, as well as minimal hurricane losses in 2009 (compared to near-record level losses reported in 2008), contributed to this improvement.

Looking Ahead

Although the financial markets continue to stabilize in early 2010, investment returns likely will be modest as interest rates are expected to remain low. Insurers’ profitability should remain stable--though volatility in the investment world and large-scale catastrophic events can change the outlook for the insurance industry quickly and dramatically.