The US property and casualty (P&C) industry recorded a $6.3 billion net underwriting loss in the first six months of 2022, down $11.4 billion from the prior year period, with the personal lines segment, specifically the auto lines, responsible for this decline, according to an AM Best report.
The Best’s Special Report, titled, “First Look: Six-Month 2022 U.S. Property/Casualty Financial Results,” states that a 9.3% growth in net earned premiums and a 27.7% decline in policyholder dividends were countered by a 15.8% increase in incurred losses and loss adjustment expenses (LAE) and a 7.2% rise in other underwriting expenses.
Additionally, the industry’s combined ratio deteriorated this year’s first quarter, from 97% in 2021 to 100%. AM Best analysts added: “We estimate that catastrophe losses accounted for 5.4 points on the six-month 2022 combined ratio, down from an estimated 7.0 points in the prior year period.
“Excluding $6.8 billion of favourable reserve development during the period (down from $9.7 billion of favourable reserve development), the accident year combined ratio for the industry was 101.9.”
Tax expenses were down 26.8% and realised capital gains dropped 62.5%, as the industry’s net income slid 17.7% to $31.4 billion. Industry surplus declined 7.9%, to $969.0 billion from the end of 2021, as $36.4 billion of net income and other surplus gains were reduced by $15.9 billion of stockholder dividends and a $104.4 billion change in unrealized losses at National Indemnity Company, Columbia Insurance Company and State Farm Mutual.
