The U.S. property/casualty (P/C) insurance industry experienced a substantial reduction in underwriting losses in 2024, with net underwriting losses narrowing to $2.6 billion from $24.6 billion in 2023, according to A.M. Best & Co. Inc. The report highlights positive trends in underwriting and operating results, with expectations for further improvement in 2025.
Underwriting and Investment Gains Drive Recovery
The P/C industry’s underwriting results benefited from improved rate momentum in most commercial lines and a notable recovery in personal lines. These gains were achieved despite continued exposure to severe convective storms and an active 2024 Atlantic hurricane season.
At the same time, the industry’s net investment income grew by an estimated 18% to $85.4 billion, driven by higher bond yields resulting from interest rate hikes. As a result, the industry’s net income is estimated to have increased by 61% to $143.5 billion in 2024.
Combined Ratio and Catastrophe Loss Impact
A key measure of underwriting profitability, the industry’s combined ratio improved to 98.9 in 2024, down from 101.9 in 2023. While this reflects stronger underwriting discipline, catastrophe-related losses still played a significant role, contributing 7.7 points to the combined ratio. Looking ahead, A.M. Best has adjusted its loss estimates for 2025 by 8.5 points, reflecting the impact of the January California wildfires.
Premium Growth and 2025 Projections
Net premiums written saw an estimated 10% increase to $946.2 billion in 2024. For 2025, A.M. Best projects a 7.3% increase, with the slightly lower growth rate reflecting the effects of premium adjustments made in the prior year.
Despite ongoing catastrophe challenges, the industry’s overall trajectory remains positive, with expectations for continued improvement in underwriting and financial performance through 2025.