Personal Lines Leads the Way to the Largest Net Underwriting Loss in over a Decade

S&P Global Market Intelligence tracks insurance numbers. With still growing inflation, the negative numbers are steadily increasing. S&P’s latest report said the underwriting red ink hit $7.34 billion in the first quarter of 2023.

It’s the largest increase in 12 years. The combined ratio hit 102.2. This is in contrast to an underwriting profit of $4.28 billion and a combined ratio of 96.1 for the first quarter of 2022.

S&P has data for 88 quarters — or 22 years — and the personal lines incurred loss ratio ratio only topped 74.8% seven times. The first quarter of 2023 is one of them. Three others have been in the past seven quarters.

The largest underwriting loss during a first quarter in those 22 years was $5.63 billion in 2001. That’s a figure not adjusted for inflation.

Even though net premiums rose 9.1% in the first quarter of 2023, S&P says inflation-related problems in private auto and an increase in natural catastrophes is the reason for the negative results.

BTW, the increase was the seventh of more than 8% in the last eight years.

The insurers reporting big losses are State Farm — at close to $2.9 billion — and Allstate’s Erie Insurance Exchange, Nationwide, American Family, State Farm General Insurance, Liberty Mutual, USAA and Farmers.

Source link: Insurance Journal —

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