In 2007, the U.S. property/casualty industry experienced its first decline in net premiums written since the World War II era, according to a new A.M. Best special report, “U.S. Property/Casualty — 2007 Financial Review.”

Driven by across-the-board softening in personal and commercial lines pricing, leakage of premium and a growing interest in alternative forms of risk transfer, net premiums written fell nearly 1.0% to $446.0 billion, the first drop since 1943, according to the report, featured in BestWeek U.S./Canada.

Meanwhile, the industry reported an underwriting profit for the second consecutive year, falling short of the $32.0 billion gain in 2006, yet posting a $22.1 billion net. A strong fourth quarter capped a solid 2007 for the industry, but net income fell almost 7% to $66.5 billion from the $71.3 billion recorded in the prior year. The after-tax return on equity slipped to 13.0% from 15.3% posted in 2006.

April 22, 2008