Analysts at AM Best have reported that US property and casualty (P&C) insurers returned roughly $12.9 billion in premiums over 2020 due to a reduction in exposures following the COVID-19 pandemic.
In particular, stay-at-home restrictions reduced the amount of travel across the US last year, which resulted in a significant reduction in exposure for automobile insurers.
Other lines of business substantially affected by COVID-19 include general liability, workers’ compensation, event cancellation and inland marine.
Where reported by insurers, AM Best found that 15% was the most common return of premium, with some returns as high as 35%, over the time period.
Some insurers, while not returning premiums, allowed forbearance measures such as extended payment terms for premiums and suspended terminations for late or non-payments.
To collect this data, AM Best reviewed 2020 statutory statements and related disclosures for more than 2,600 US P&C insurers.
Of these, nearly 400 insurers reported specific amounts for return of premium last year related to the COVID-19 outbreak.
Notably, the majority of premium returns appear to have been made during the first half of the year, with $8.3 billion of the $12.9 billion total reported by June 30th, 2020, according to AM Best.