US P&C insurers report significant improvements in 2024

The US P&C insurance industry’s 2024 net income is estimated at $170bn, according to data analytics firm Verisk and The American Property Casualty Insurance Association (APCIA). Adjusting for over $70bn in capital gains realised by one insurer, full-year 2024 net income is estimated to be $100bn. Last year saw an underwriting gain of $24.8bn in 2024, a significant improvement compared to the underwriting loss of $21.8bn recorded in 2023, said Verisk and APCIA. It was the first full-year underwriting gain reported in four years. “While many of the loss drivers of 2023 persisted into 2024, the industry’s ability to bring premiums closer to the requisite levels has led to an underwriting gain for the first time since 2020,” said Saurabh Khemka, co-president of underwriting solutions at Verisk. “However, the broader market continues to face challenges, particularly in property coverages, where the impact of natural catastrophes remains a defining issue. The increasing frequency and severity of these events reflect shifting weather patterns and evolving risk landscapes, underscoring the growing complexity of underwriting in the property/casualty space.” Khemka went on: “Last year marked the second-worst year for catastrophic losses since 1950, with the vast majority of damages stemming from hurricane and convective storm activity. Most notably, Hurricane Milton, along with a series of late-season storms, drove fourth-quarter catastrophe claims to surge 113% higher than the same period in 2023, highlighting both the volatility and financial strain insurers face.” Insurers wrote $926bn in premiums during 2024, compared to $851bn in 2023, while earned premiums grew 9.8% to $895bn. The estimated US insurance industry net underwriting gain of $24.8bn is a significant improvement over the $21.8bn in net underwriting losses reported in 2023, said Verisk and APCIA. The combined ratio improved to 96.4% in 2024 versus 101.6% in 2023. The policyholders’ surplus increased from $1,013bn at the end of 2023 to $1,082bn at the end of 2024. Khemka added: “On a positive note, personal auto demonstrated improvements, primarily due to necessary premium adjustments within personal lines. While commercial auto premiums followed a similar trend, its growth rate did not match the levels seen in 2023. These shifts signal a market recalibrating in response to prolonged underwriting losses, but with ongoing uncertainty, carriers will need to balance pricing, risk selection and claims management strategies to sustain profitability. Looking ahead, insurers will continue to rely on technology that enhances data-driven decision making and underwriting accuracy.” Robert Gordon, senior vice-president, policy, research and international at APCIA, said: “The property casualty insurance industry continued to stabilise in 2024, with a swing from close to a $22bn net underwriting loss to a nearly $25bn net underwriting gain. Net income for the year improved significantly as well, although roughly 40% resulted from the capital gains of unusual stock sales by a multinational conglomerate that owns several insurers.” In the second half of 2024, the industry’s net underwriting gain increased to $21.0bn, up from $3.8bn in the first half of the year and $1.7bn in the same period of 2023. The second half of 2024 was heavily impacted by hurricanes Helene at the end of the third quarter and Milton at the beginning of the fourth quarter, while the second half of 2023 experienced below-average catastrophe activity. Net written premiums increased by $29.8bn in the second half of 2024, representing a growth of 6.9% compared to the previous year. The combined ratio improved from 99.1% in the second half of 2023 to 95.3% in the same period this year. These results are based on approximately 97% of all business underwritten by private US property/casualty insurers, said Verisk and APCIA.

US P&C insurers report significant improvements in 2024

Underwriting gain of $24.8bn in 2024 compared to loss of $21.8bn in 2023

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