According to global credit rating agency AM Best, the US property & casualty (P&C) industry recorded a $21.2 billion net underwriting loss in 2023, which slightly improves upon the $24.9 billion loss recorded in the prior year.
These preliminary results are detailed in a recent report released by Best.
From what we understand, the data is derived from companies’ annual statutory statements received as of March 8, 2024, representing an estimated 97% of the total P&C industry’s net premiums written.
According to Best, the P&C industry’s combined ratio improved slightly by 0.9 percentage points, reaching 101.6 in 2023.
Best noted that catastrophe losses accounted for an estimated 8.7 points on the combined ratio, up from 7.3 points in 2022, which was heavily driven by record severe convective storm losses.
Moreover, the underwriting loss came about despite a 9.9% growth seen in net earned premiums. Best explained that this was countered by a 10% increase in incurred losses and loss adjustment expenses, as well as a 6.4% rise in other underwriting expenses and a 4.5% increase in policyholder dividends.
Additionally, net investment income virtually remained unchanged from last year, which resulted in the lower 2023 underwriting loss boosting pre-tax operating income by 4.8% to $50.0 billion.
Lastly, Best also flagged up how a $51.1 billion change in net realized capital gains at National Indemnity Company resulted in net income for the industry more than doubling to $90.1 billion.
