The U.S. property/casualty (P/C) industry recorded a $32.2 billion net underwriting loss in the first nine months of 2023, $7.6 billion worse than the underwriting loss posted in the same prior-year period, according to a new AM Best report.
These preliminary results are detailed in a new Best’s Special Report, titled, “First Look: Nine-Month 2023 US Property/Casualty Financial Results,” and the data is derived from companies whose nine-month 2023 interim period statutory statements were received as of Dec. 4, 2023, representing an estimated 99% of total industry net premiums written and 98% of policyholder surplus.
According to the report, losses in the personal lines segment was main driver of the P/C industry’s combined ratio of 103.4 for the nine-month period, a 0.7-percentage-point deterioration from the same period in 2022. Catastrophe losses accounted for an estimated 9.8 percentage points on the nine-month 2023 combined ratio, up from an estimated 7.3 points in the first nine months of 2022.
The P/C industry saw net earned premium growth of 9.7% and a 2.2% decline in policyholder dividends in the nine-month period; however, these were countered by a 11.9% increase in incurred losses and loss adjustment expenses (LAE) to $476.4 billion and a rise in other underwriting expenses. With earned net investment income virtually equivalent to the prior-year period at $51.4 billion, the underwriting loss drove pre-tax operating income down 28.4%, to $19.9 billion. A $50 billion change in net realized capital gains at National Indemnity Company resulted in net income for the industry more than doubling to $65.7 billion.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=338477.