According to AM Best, the US property & casualty (P&C) industry recorded a $3.8 billion net underwriting gain in the first six months of 2024, a major improvement from the $24 billion loss reported in the previous year.
The agency stated that the turnaround in the personal lines segment was primarily responsible for the improvement in underwriting results
At the same time, a $50 billion change in net realised capital gains at National Indemnity Company resulted in the industry’s net income skyrocketing from $9.4 billion in the first half of 2023 to $97.6 billion this year.
AM Best also noted that there was an increase of 11.3% seen in net earned premiums offset by a 2.5% increase in incurred losses and loss adjustment expenses (LAE), as well as a 24.9% rise in other underwriting expenses.
Moreover, the industry’s combined ratio improved to 97.7%, compared to 104.4% from last year.
AM Best said that it estimates that catastrophe losses accounted for 7.4 points on the six-month 2024 combined ratio, down from an estimated 9.7 points in the prior year, which had been impacted by record losses due to severe convective storm losses.
In addition, AM Best explained that the industry’s underwriting gain, coupled with a 26.6% increase in earned net investment income, primarily drove a 374.4% increase in pre-tax operating income, to $47.3 billion.
Lastly, AM Best flagged up that the industry’s surplus increased from the end of 2023 to $1.1 trillion, as a combined $100.6 billion of net income and contributed capital was reduced by a $23 billion change in unrealised losses, $2.1 billion of other surplus losses, and $13.3 billion of stockholder dividends.
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