US Property-Casualty Insurers Post 9-Month Underwriting Loss

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November 29, 2021 |

Four stacks of coins in order from tallest to shortest with a red arrow above them going downward

Increased losses and expenses led to a $6.1 billion underwriting loss for the US property-casualty insurance industry over the first 9 months of 2021, according to A.M. Best.

The findings, from a new Best's Special Report titled "First Look: 9-Month 2021 Property-Casualty Financial Results," are based on data derived from companies' 9-month 2021 interim statutory statements that were received as of November 17, the rating agency said. The data represents an estimated 97 percent of the total US property-casualty industry's net premiums written.

According to the Best report, the US property-casualty insurance industry recorded 8.2 percent growth in net earned premiums and experienced a 53.4 percent decline in policyholder dividends over the first 3 quarters compared with the same period in 2020. That premium growth was offset by a 12.1 percent increase in incurred losses and loss adjustment expenses and a 5.9 percent increase in underwriting expenses, Best said.

Despite a 7.8 percent increase in net investment income coupled with an additional $1.4 billion in other income, the net underwriting loss reduced the industry's pre-tax operating income by 5.6 percent over the first 9 months of 2021, Best said. A $9.7 billion increase in realized capital gains contributed to a 21.0 percent increase in the US property-casualty insurance industry's net income to $42.4 billion over the same period in 2020.

The industry's combined ratio weakened from the same period in 2020 to 99.5 percent, according to A.M. Best. The rating agency estimated catastrophe losses accounted for 8.2 percentage points of the 9-month 2021 combined ratio, down from 8.4 percentage points during 2020's first 3 quarters.

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November 29, 2021