THE NON-LIFE insurance market sustained an underwriting loss last year for the first time since 2002, as the insurance industry was hit by the double-whammy of the recession and extreme weather events.

The Insurance Federation Industry’s Factfile for 2009, which will be published today, shows that total premium income in the non-life sector (which includes motor, property and liability insurance) shrank by 6.3 per cent to €3.12 billion. Household insurance was the worst-performing class within the sector.

The IIF’s 23 non-life members, which account for 95 per cent of this market, suffered a net underwriting loss of almost €175 million on household cover. This was largely a result of the extensive flooding experienced last November, which was estimated to have cost the industry about €245 million in claims costs.

Insurers more or less broke even on commercial property and motor insurance, but liability cover was the only insurance class that delivered an underwriting profit. The net result was an underwriting loss of almost €179 million across the total non-life market. However, this was shored up by a strong inflow of investment income, with insurers earning €314 million from this revenue stream. This resulted in an overall operating profit of €135 million on this side of the insurance market.

Mike Kemp, IIF chief executive, said motor insurance rates had stabilised and said he didn’t expect them to change much over the rest of the year.