P&C Underwriting Losses in 2023 — $21.1 billion

The American Property Casualty Insurance Association (APCIA) and Verisk did an analysis of property and casualty’s 2023 underwriting. The results are from statistics released by 96.9% of the nation’s property and casualty insurers.

The results aren’t pretty.

P&C insurers lost $21.1 billion in underwriting in 2023. And the 2023 statistics look pretty much like that of 2022 and the $24.8 billion lost in underwriting.

Natural catastrophes and inflation caused most of the losses. Added to the pain is the biggest drop in net income in a decade or more. Net income fell to $35.7 billion compared to $44 billion in 2022.

That’s a 19% drop.

Incurred losses and loss adjustment expenses in 2023 rose by 10.1% and earned premiums are up 9.9%. There wasn’t much change in 2023’s combined ratio. It was 101.6% compared to 2022’s combined ratio of 102.4%.

APCIA senior vice president of policy, research and international Robert Gordon said the $21 billion in red ink follows the $25 billion in losses in 2022.

“While overall industry surplus — representing the supply capacity for insurance coverage — modestly increased in 2023 thanks to investment gains, it has still not recovered from the $72 billion contraction in 2022 and fell to a five-year low relative to premium revenue,” Gordon said.

He also pointed out that homeowners and auto insurance again performed poorly as it did in 2022.

“Homeowners and auto insurance performed particularly poorly: in both 2022 and 2023, loss ratios exceeded levels not seen in more than 20 prior years,” Gordon said. “As insured losses skyrocket, many policyholders in the U.S. face rising insurance costs and availability challenges, which is why the insurance industry is analyzing these issues and advocating for solutions. However, the market won’t fully stabilize until insurers can close the gap between losses and rates.”

The policyholders surplus rate of return dropped 3.6% in 2023 and is down from 4.4% in 2022. 

Source link: Carrier Management — https://bit.ly/3VLXwbz

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The Professional Insurance Agents Western Alliance is a membership organization promoting and enhancing the success of independent agencies seeking to grow, learn and be heard within the industry.


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