Homeowners Insurance Market Turns Corner

If you write personal lines–or own a home–then you know. Homeowners insurance rates are up–significantly in some states such as Texas. But better news is around the corner judging by a new industry report.

For the first time in five years, the U.S. homeowners insurance market posted a combined ratio of less than 100. While direct written premiums in the U.S. homeowners insurance market rose 13.4% in 2024 to nearly $173.1 billion, the net combined ratio for the line fell to 99.3–11.2 points better than the 110.5 ratio recorded in 2023.

The net loss ratio of 65.2% was also the lowest since 2019 and a 10.3-percentage-point year-over-year improvement from 75.5%.

Higher prices explained much of the industrywide loss and combined ratio improvements, but not all homeowners insurers grew premiums last year, according to a new report from S&P Global Market Intelligence (S&P GMI).

“Insurers’ aggressive pursuit of homeowners rate increases fueled the rise in premiums,” the report revealed. The national average rise in owner-occupied homeowner rates in 2024 rose to 11% from 9.7% in 2023, according to Market Intelligence’s RateWatch application.

S&P GMI said a ranking of the top 20 homeowners insurers based on direct written premium volume shows the three largest players–State Farm, Allstate, and USAA–each growing by double digits and reporting improved combined ratios. But in spite of what S&P GMI calculates to be a 16.4 % jump in direct premiums to $31.5 billion for the year, State Farm’s net combined ratio remained above 100, ending up at 105.4.

The report also noted that insurers’ direct loss and loss-adjusted expense ratios in 2024 rose above 90% in several states as a result of severe convective storms in the second and third quarters of 2024 and from Hurricane Helene in the third quarter.

Nebraska, which was impacted by tornadoes and hail in two separate storms last June, had the highest direct loss/LAE ratio of any state at 136.6%.

S&P GMI said in its analysis that four insurers in the top 10 of the analysis had combined ratios of over 100: Auto Owners Exchange at 117.07, Nationwide at 105.8, State Farm at 105.4, and American Family at 103.8.

Nationwide Mutual Insurance Co., the only company among the top 10 largest homeowners to record lower premiums in 2024 than 2023–a drop of 8.6 percent to just over $4 billion–nonetheless recorded 17.9 points of combined ratio improvement. The improved ratio, however, remained above breakeven in 2024 at 105.8.

The four lowest ratios belonged to Chubb, at 81.1; Farmers, at 85.4; Allstate, at 89.5; and Liberty Mutual, at 93.1.

Topics Trends Homeowners Market