According to AM Best, the US property and casualty (P&C) industry posted a $4.1 billion net underwriting gain in the first nine months of 2024, in comparison to a $32.1 billion loss recorded in the prior year period.
At the same time, the US P&C industry recorded a $130 billion net income for 9M’24, a significant improvement from last year’s $64.4 billion.
Meanwhile, the agency noted that a 9.5% increase in net earned premiums offset a 1.3% increase in incurred losses and loss adjustment expenses (LAE) and a 9.2% rise in other underwriting expenses.
“The continued turnaround in the personal lines segment was primarily responsible for the improvement in underwriting results,” AM Best said.
The US P&C industry’s combined ratio improved to 97.9%, compared to 103.7% from the prior year period.
AM Best estimates that catastrophe losses accounted for 8.8 points on the nine-month 2024 combined ratio, down from an estimated 10.0 points in the prior year.
Excluding $8.5 billion of favorable reserve development during the first nine months of 2024, the industry’s accident year combined ratio was 99.2%.
In addition, the industry’s underwriting gain, combined with a 22.1% increase in earned net investment income, primarily drove pre-tax operating income up 261.7%, to $65.9 billion.
The agency adds, that a combined $21.2 billion change in net realised capital gains at three Berkshire Hathaway Insurance Group companies aided in the industry’s net income doubling from the prior period to $130 billion.
Lastly, AM Best flagged up that the industry surplus increased from the end of 2023 to $1.1 trillion, as a combined $131.4 billion of net income and contributed capital was reduced by a $11.6 billion change in unrealised losses, $1.4 billion of other surplus losses and $15.4 billion of stockholder dividends.
This analysis was based on data derived from companies’ nine-month 2024 interim statutory statements as of November 25, 2024, which AM Best estimates to be representative 98% of total industry net premiums written and 96% of policyholder surplus.
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