Underwriting Gain

Underwriting Gain

The profit an insurance company generates after paying all claims. That is, the underwriting gain is what is left over after the premiums the company collects are added to its investment income and the amount the company pays for claims on its policies is subtracted. An underwriting gain is also called an underwriting profit.
References in periodicals archive ?
The division, which includes property/casualty commercial and personal lines, booked a $147 million underwriting gain for the 2019 second quarter, compared to an $89 million loss over the same period a year ago.
Business Insurance income was $351 million after-tax, a decrease of $34 million attributable primarily due to higher catastrophe losses, a lower underlying underwriting gain and lower net favorable prior year reserve development, partially offset by higher net investment income.
The excess/abnormal return for each year is the difference between actual and theoretical underwriting gain or loss.
The industry's underwriting gain of $2.1 billion in the quarter was down from $3.9 billion in the first quarter of 2015, and a 5.8% increase in incurred losses -- to $72.5 billion -- drove a 1.2 point increase in the industry's loss ratio to 57.1.
FULL-YEAR 2015 FINANCIAL RESULTS * $ Percent Billions change from 2014 Combined Ratio 97.8 -0.8% Expenses 157.9 14.3% Incurred Losses 350.2 4.6% (Including loss adjustment expenses) Investment Income 47.2 1.9% Net After-Tax Income $56.6 1.4% Net Earned Premiums $505.8 3.7% Net Underwriting Gain (Loss) 8.7 -28.6% Other Items 1.2 142.9% Policyholder Dividends 2.5 3.7% Pre-Tax Income 66.7 1.5% Pre-Tax Operating Income 57.3 2.5% Realized Capital Gains (Losses) 9.4 -8.5% Surplus (End of Period) $673.7 -0.2% Taxes 10.1 -1.0% * Figures may not add to totals due to rounding.
But the percentage that reported an underwriting gain also increased to 36 percent from 32 percent.
Since 2006, the PBGC has had an underwriting gain of more than $16 billion.
There has been some empirical work related to the SRA with an emphasis on program outlays and the underwriting gain or loss potential for the AIPs, but the outcome is a negotiated solution without a clear determination of what constitutes an optimal level of risk sharing between the private and public sectors.
org for her insurance blog, "Straight Talk." Historical View: P&C Underwriting Performance & Profitability Return on Combined ratio Average surplus First half of 2010 101.1 * 6.3% 2009 101 5.8% 2005 101 9.6% 1979 100.6 15.9% First Half 2010 Financial Results * P&C Nationwide ($ Billions) Net Earned Premiums $207.1 Incurred Losses 151.9 (Including loss adjustment expenses) Expenses 59.5 Policyholder Dividends 0.8 Net Underwriting Gain (Loss) -5.1 Investment Income 23.6 Other Items 0.6 Pre-Tax Operating Gain 19.2 Realized Capital Gains (Losses) 2.2 Pre-Tax Income 21.4 Taxes 4.9 Net After-Tax Income $16.5 Surplus (End of Period) $530.5 Combined Ratio 101.7 ** * Figures may not add to totals due to rounding.
He noted that the company still produced an underwriting gain of $6.1 million in the quarter despite those obstacles.
* RMA proposed cuts also apply to the USDA-designated "underserved states." The cuts in delivery payments will more than offset the RMA proposed underwriting gain in those 16 states designated by USDA as underserved, reducing incentives to write and service producers there.
Consider a second example: if premiums were $2 million and indemnities were only $1 million, the loss ratio would be 0.5 and the underwriting gain would be $1 million.