US P/C insurance industry posts first underwriting profit in first half of 2021

The U.S. property/casualty insurance industry posted net underwriting earnings of $3.7 billion and net income of $94.6 billion for the first half of 2024, according to a new report.

“After years of consistent losses, premium growth is helping the overall industry move toward stabilization, with positive underwriting earnings in the first half of the year for the first time since 2021,” said Saurabh Khemka, co-president of underwriting solutions at Verisk. in a press statement. announced figures released jointly by Verisk and the American Property Casualty Insurance Association (APCIA) yesterday.

Basing their estimates on information from filings with insurance regulators by insurers representing about 91 percent of the U.S. private property/casualty market, the insurers, Verisk and APCIA reported that net written premiums increased by just over 10 percent , up to $462.7 billion.

The 10.3% increase was similar to a 9.6% increase in net written premiums recorded for the first half of 2023 compared to the previous six-month period.

However, losses incurred increased by just 2.2% for the first half of 2024, fueling a 6.2 point decline in the industry loss rate.

With the expense ratio also falling by half a point, the combined ratio for the first half of this year is estimated at 97.6, compared to 104.2 for the first half of last year.

Robert Gordon, senior vice president of policy, research and international at APCIA, said “it remains to be seen whether insurers can end the year with an underwriting profit after two consecutive years of underwriting losses,” noting that while commercial lines were profitable , personal lines insurers are “still struggling to keep up with rising losses” – with the ongoing wildfire season and an expected increase in hurricane season activity ahead.

“Insurer surplus continues to recover from catastrophic losses in 2022, although it has not kept pace with inflation or economic demands for insurance coverage,” Gordon added.

In the first half of 2024, the industry’s policyholder surplus increased slightly – to $1.07 billion from $1.014 billion at the end of 2023.

However, the insurer’s rate of return on average policyholder surplus rose to 9.1% in the first half of 2024, up from 3.6% at the end of 2023.

According to the Verisk/APCIA report, investment income rose 22.2% to $39.6 billion, but the biggest contributor to the $94.6 billion net income in the bottom line after taxes , was net realized earnings of $58.6 billion. Adjusting for more than $50 billion in capital gains made by an insurer, earnings in the first half of 2024 are estimated at about $45 billion.

Source: Verisk, APCIA

TOPICS
USA Loss of Profit Market Underwriting Property Casualty