P&C insurers recover with $3.8 billion underwriting gain in H1 2024

P&C insurers recover with $3.8 billion underwriting gain in H1 2024 | Insurance Business America

Property

P&C insurers recover with $3.8 billion underwriting gain in H1 2024

Strong premium growth and lower catastrophe losses noted

Property

By
Kenneth Araullo

The US property and casualty (P&C) insurance industry reported a net underwriting gain of $3.8 billion for the first half of 2024, marking a significant improvement from the $24 billion loss recorded in the same period of 2023, according to a report from AM Best.

The recovery was driven by an 11.3% increase in net earned premiums, which helped offset a 2.5% rise in incurred losses and loss adjustment expenses (LAE) and a 24.9% increase in other underwriting expenses.

The improvement in the personal lines segment was primarily responsible for the turnaround in the industry’s underwriting results. The combined ratio for the industry improved to 97.7 in the first half of 2024.

Catastrophe losses accounted for 7.4 points on the combined ratio, down from 9.7 points during the same period in 2023, which had been impacted by record losses from severe convective storms. Without $8 billion in favorable reserve development during the first six months of 2024, the industry’s accident year combined ratio stood at 99.4.

The underwriting gains, along with a 26.6% increase in net investment income, contributed to a 374.4% rise in pre-tax operating income, reaching $47.3 billion. A $50 billion swing in net realized capital gains at National Indemnity Company further boosted the industry’s overall performance, leading to a sharp increase in net income from $9.4 billion in the first half of 2023 to $97.6 billion this year.