Profitability of the Property/Casualty Insurance Industry

GAO testified on the property/casualty insurance industry, specifically: (1) the industry's pricing strategies; (2) industry profitability; (3) the cyclical nature of that profitability; (4) the financial outlook for the industry; and (5) the current difficulties in the industry. GAO found that: (1) property/casualty companies used a pricing strategy that sacrificed underwriting profit margins to generate cash for investment purposes; (2) the industry made between $52 billion and $80 billion in pre-tax net gains over the last 10 years; (3) property/casualty underwriting is subject to profitability cycles; (4) the underwriting cycle is moving in a positive direction; and (5) the industry is projecting substantial net gains over the next 5 years.