P&C Industry Experiences $6.1B in Underwriting Losses for Nine Months 2021

According to a new AM Best report, increased losses and expenses in the property/casualty (P/C) industry in the United States during the first nine months of 2021 resulted in a $6.1 billion underwriting loss for the period.

Source: AM Best | Published on November 22, 2021

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This financial review is detailed in a new Best's Special Report, "First Look: Nine-Month 2021 Property/Casualty Financial Results," and the data is derived from companies' nine-month 2021 interim statutory statements received as of Nov. 17, representing an estimated 97 percent of total net premiums written in the U.S. P/C industry.

According to the report, the P/C industry saw an 8.2 percent increase in net earned premiums and a 53.4 percent decrease in policyholder dividends compared to the same period last year; however, this was offset by a 12.1 percent increase in incurred losses and loss adjustment expenses (LAE) and a 5.9 percent increase in underwriting expenses. Despite an increase in net investment income of 7.8 percent and an increase in other income of $1.4 billion, the net underwriting loss reduced pre-tax operating income by 5.6 percent for the nine-month period. A $9.7 billion increase in realized capital gains contributed to a 21.0 percent increase in industry net income to $42.4 billion over the same prior-year period.

The industry's combined ratio fell from 99.5 to 99.5 in the previous year. Best estimates that catastrophe losses accounted for 8.2 percentage points of the nine-month combined ratio in 2021, down from 8.4 points in the first three quarters of 2020.

To obtain a complete copy of this special report, go to http://www3.ambest.com/bestweek/purchase.asp?record code=314937.