AM Best is worried about the underwriting performance of property-casualty insurers. The 2022 stats have been released and the personal lines segment suffered the most.
This is especially true of personal auto.
According to the AM Best report titled, 2022 P/C Snapshot: Unprofitable Auto and Property Results Weaken P/C Underwriting Performance, the net underwriting loss hit $25.7 billion in 2022.
David Blades is the associate director of Industry Research and Analytics at AM Best. He said the $25.7 billion figure is huge and a big concern because it follows a $3 billion underwriting loss I 2021.
- Personal lines saw a $40 billion underwriting loss
- Personal auto accounted for 80% of the $40 billion
- That’s 8-times higher than the 2021 losses
- Homeowners and farmowners policies also saw a net underwriting loss for the 3rd consecutive year
“P/C claims expenses were magnified by inflationary pressures on the costs of repairing property and automobiles, as well as by lingering supply chain issues,” Blades said. “These factors elevated claims expense figures and challenged insurance companies’ reserving practices, adversely affecting their operational performance.”
Christopher Graham is a senior analyst for AM Best. He said the good news in the report deals with commercial lines. It had positive underwriting results in 2022 and the lines have seen positive outcomes in four of the last five years.
“Social and medical inflation have contributed to higher loss costs,” Graham said. “The number of claims has increased for virtually all casualty lines involving claimant-attorney representation for several years, with juries typically awarding plaintiffs large settlements. As medical technology and treatments advance, medical costs are likely to continue escalating.”
Source link: Insurance Business America — https://bit.ly/3ON0pFF