Property-Casualty Forecast Calls for Modest 2021 Underwriting Profit

Property-casualty insurers are expected to post modest underwriting profits in 2021, according to a new forecast from the Insurance Information Institute (Triple-I) and Milliman.

The forecast calls for the industry to realize a combined ratio of 99 percent this year, nearly the same as in 2020, according to a Triple-I blog post (Triple-I Blog; "Triple-I/Milliman: Property/Casualty Underwriting Profits To Continue in 2021," by Maria Sassian, posted May 18, 2021). Early forecasts for 2022 and 2023 project similar results, the Triple-I said.

The Triple-I/Milliman property-casualty forecast was released May 18 in a members-only virtual webinar, the blog post reported.

Industry premiums are expected to increase 7.1 percent this year, according to the forecast, a sizable jump from a 2.5 percent increase in 2020. The Triple-I attributed the increase to the combination of an economic recovery and the hard market. While premium growth is expected to slow in 2022 and 2023, according to the forecast, it's projected to remain above 5 percent in both years.

The Triple-I post quoted Jason B. Kurtz, principal and consulting actuary at Milliman, as saying that property-casualty industry underwriting results will gradually improve beginning in 2022 as more individuals are vaccinated against COVID-19 and the economic recovery continues.

The post also quotes Dr. Michel Léonard, vice president and senior economist at the Triple-I, discussing the impact of the wide range of various gross domestic product growth and inflation projections.

Given that uncertainty, he advised those in the property-casualty insurance industry to focus on the industry's own growth, which outperformed the broader economy in 2020 and is poised to do so again this year.