US P/C Industry Turns in $32.2B Underwriting Loss After 9 Months

U.S. property/casualty underwriting results deteriorated during the first nine months of 2023 to a loss of $32.2 billion.

The result, highlighted in short financial review from AM Best, is $7.6 billion worse than the same period a year ago.

The blame, which has been well documented lately, lies primary with the personal lines segment – specifically the homeowners lines of business and driven by a record amount of losses from convective storms.

The insurance industry rating agency earlier this month said it was keeping its negative outlook on the U.S. personal lines insurance industry. The financial performance of auto insurers has been the main reason for the outlook, but recently AM Best changed its view of the homeowners line from stable to negative. Meanwhile, AM Best maintained its stable outlook for commercial lines.

The U.S. P/C industry finished September with a combined ratio of 103.4 for the year compared to 102.8 last year. Catastrophe losses accounted for 9.8 points to the ratio – more than the 7.3 points contributed by catastrophe losses a year ago – and without $5.5 billion of favorable reserve development, the industry’s nine-month accident-year combined ratio was 104.3.

U.S. P/C surplus fell 0.3% from the prior year end to $980 billion.

AM Best said a $50 billion change in net realized capital gains at Berkshire Hathaway’s National Indemnity Company resulted in net income for the industry more than doubling to $65.7 billion.

Data was derived from companies whose nine-month 2023 interim period statutory statements were received as of Dec. 4, 2023, representing an estimated 99% of total industry net premiums written and 98% of policyholder surplus, AM Best said.

Topics USA Profit Loss Underwriting Market Property Casualty