The US property/casualty industry's net premiums written receded for an unprecedented 10th consecutive quarter as the soft market continued for insurers.

That is according to AM Best Co.'s special report on US property/casualty, which revealed that net premiums written fell 1.2 percent to $105.8 billion through the first quarter of 2010 amid sustained competitive market conditions in most commercial lines, weak exposure growth, excess capacity and growth in alternative forms of risk transfer.

But the sector also benefited from the continued recovery in the financial markets to post a net profit after-tax of $11.5 billion in the first quarter, rebounding from a net loss of $900 million during the same period in 2009, driven by a reported $2.9 billion in realised capital gains.

The industry's combined ratio also improved by 1.2 points to 101 percent in the three months ended March 31, 2010, reflecting favourable reserve development on prior accident years and significant but reduced losses in the mortgage and financial guaranty segments.

Meanwhile improved underwriting and investment results along with significant capital contribution in the US reinsurance segment pushed the US property/casualty industry's policyholders' surplus up 24.4 percent to $545.5 billion for the year ended March 31, 2010.

The US reinsurance and Bermuda market posted a combined ratio of 104.7 percent, including about 20 points of catastrophe losses, slightly offset by 6.6 points of favourable loss-reserve development.

Absent catastrophe-related losses and favourable loss-reserve development, the underwriting performance of the US reinsurance and Bermuda market segment appeared to be trending at around a combined ratio of 92 percent.

Overall, the US reinsurance and Bermuda market reported returns on equity and revenue of seven percent and 10 percent respectively during the quarter.

Total revenue for the US reinsurance and Bermuda market stood at $16.2 billion, while net income was $1.6 billion.