Revealed – US P&C sector underwriting loss for first nine months of 2023
Revealed – US P&C sector underwriting loss for first nine months of 2023 | Insurance Business America
Insurance News
Revealed – US P&C sector underwriting loss for first nine months of 2023
AM Best report outlined factors that resulted in latest figures
Insurance News
By
Roxanne Libatique
The US P&C sector incurred a net underwriting loss of $32.2 billion in the first nine months of 2023, according to AM Best’s First Look Report.
This was a $7.6 billion worsening compared to the corresponding period in the previous year.
The industry saw a 9.7% growth in net earned premiums and a 2.2% reduction in policyholder dividends.
Meanwhile, it saw an 11.9% surge in incurred losses and loss adjustment expenses (LAE), accompanied by a 7.3% increase in other underwriting expenses.
The personal lines segment, particularly the homeowners line of business, emerged as the primary contributor to an underwriting results downturn.
Factors driving changes in the P/C industry
A decline in underwriting performance was reflected in the industry’s combined ratio, which deteriorated to 103.4, AM Best reported.
Catastrophe losses, including record severe convective storm losses, accounted for 9.8 points on the nine-month 2023 combined ratio – a more adverse outcome compared to the same period in 2022, where it stood at 7.3 points.
Excluding $5.5 billion of favorable reserve development during the first nine months of 2023 (down from $6.7 billion), the industry’s accident year combined ratio reached 104.3.
Net income changes
Net investment income remained relatively stable, while the underwriting loss played a pivotal role in a 28.4% decline in pre-tax operating income, totaling $19.9 billion.
A a significant change in net realized capital gains at National Indemnity Company resulted in the industry’s net income more than doubling to $65.7 billion.
Industry surplus experienced a slight decline to $980 billion, according to AM Best.
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