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 — https://bit.ly/3C3DAGD
