AM Best, the credit rating agency, reported that US property and casualty (P&C) mutual insurance companies achieved a net income of $26.0 billion in 2024, a notable rebound from a $10.8 billion net loss in 2023.
AM Best evaluates the financial strength and performance of insurers, providing market insight for industry stakeholders.
According to AM Best’s Market Segment Report, “Profitable Results for US Property/Casualty Mutuals Owed to Improved Rate Adequacy,” the improved 2024 results were driven by double-digit growth in net written and earned premiums.
This reflects insurers’ continued focus on maintaining adequate rates after several years of challenging conditions, including heightened weather-related claims, shifts in the reinsurance market, inflationary pressures, and equity market fluctuations.
“Although losses incurred remained flat from the prior year, underwriting expenses were up by approximately 8%, largely due to rising commission expenses given the segment’s higher premium levels,” commented Lauren Magro, Senior Financial Analyst, AM Best. “At the same time, fixed income securities continued to benefit from the higher interest rate environment, and net investment income for the segment increased by nearly 22% year over year.”
Despite the overall gains, AM Best highlighted that severe weather continues to impact P&C mutual insurers. While the number of weather events in 2024 matched 2023 levels, the severity of related losses nearly doubled. Secondary perils, such as severe convective storms, also contributed significantly. AM Best further noted lingering uncertainty regarding tariffs and their potential short-term effects on mutual insurers.
While personal lines remain the largest portion of this sector, commercial lines continue to play a key role in diversification and providing policyholders with comprehensive coverage. However, AM Best cautioned that commercial liability lines can produce variable results.
“Liability-related exposures still make up nearly 40% of the segment’s net premiums written. Social inflation, nuclear verdicts and higher claim defence costs have dampened results in these lines and could deteriorate loss reserves and operating results given the longer-tail nature of these lines,” added Janet Hernandez, Senior Financial Analyst, AM Best.
Overall, AM Best concluded that the P&C mutual segment remains financially stable and resilient. Mutual insurers have maintained a focus on capital preservation, and market share has shifted only slightly over the past five years.
Guided by strategies that prioritise long-term financial stability and service to policyholders, AM Best emphasised that mutual insurers are well-positioned to respond to emerging risks and evolving market conditions.
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