Net income for U.S. property/casualty insurers fell to $19.1 billion in 2011 from $35.2 billion the previous year, according to a new report by the Property Casualty Insurers Association of America and Insurance Services Office Inc.

Catastrophe losses were a major factor in the property/casualty industry’s underwriting losses, which grew to $36.5 billion in 2011 from $10.5 billion in 2010, BusinessInsurance.com reported.

The report attributes the deterioration in underwriting results primarily to a spike in net losses and loss adjustment expenses, which rose to $38 billion in 2011 from $14.3 billion in 2010. The industry’s combined ratio also deteriorated in 2011, rising to 108.2 percent from 102.4 percent a year earlier. A ratio of 100 or less indicates profitability; above 100, losses.

Michael R. Murray, associate vice president for financial analysis at Jersey City, N.J.-based ISO, a unit of Verisk Analytics Inc., noted the 2011 combined ratio is the worst annual underwriting result since the 115.9 percent combined ratio for 2001.

“Poor underwriting results are particularly problematic in the current environment because of the toll that long-term declines in interest rates and investment leverage have taken on insurers’ ability to use investment earnings to balance underwriting losses,” Murray said in a statement. “Bottom line, insurers now need much better underwriting results just to be as profitable as they once were.”

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