U.S. P&C Industry Took $26.5B Net Underwriting Loss in 2022

Al3x Lee

Guru
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The U.S. property and casualty (P&C) insurance industry posted a $26.5 billion underwriting loss in 2022 as personal auto losses, and Hurricane Ian dropped the combined ratio to 102.7, according to a new report from AM Best.

The 2022 results represent a $21.5 billion drop from 2021’s underwriting loss and 99.7 combined ratio, the ratings agency said in its “First Look: 12-Month 2022 U.S. Property/Casualty Financial Results” report. The industry boosted its net premiums written by 8.4% to $751.6 billion in 2022, AM Best said. However, even solid premium growth and a 21.4% drop in policyholder dividends could not counteract the industry’s nearly 14% increase in incurred losses and loss adjustment expenses, along with a 6.2% jump in other underwriting expenses.

When excluding $3.8 billion in favorable reserve development and the lowest amount of reserve releases in the last five years, the industry posted a 103.2 accident-year combined ratio. Catastrophe losses added 6.9 points to the 2022 combined ratio, down from 7.7 points in 2021.

Policyholder surplus—a measure of the industry’s financial strength—dropped 6.7% to $951.9 billion by the end of 2022 from 1.02 trillion at the start of the year.

Net income decreased by 31.3% to $42 billion last year, as tax expenses and realized capital gains dropped 35.2% and 82.2%, respectively. For the research, AM Best evaluated annual statements from insurers writing an estimated 96% of all U.S. P&C net premiums written
 
If the mainstream news media carried this story, our days would be much easier. "Why is my insurance going up??? I haven't had any claims. It should be going down, my car/house/building is getting older"......

Mainstream media would find a way to say that the carriers mismanaged premiums, investments & lost all the money for favorable corporate tax loopholes
 
NY markets are a mess PL and CL. Every week another carrier gives us bad news. The worst I've seen in close to 40 years in the business. Is any state OK?

I've heard New York, California and Florida have been hit hard, but I don't think it's really great in any state. The industry as a whole has been hardening for the last few years.

It sounds like you've been at it a long time!
 
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