The U.S. property/casualty insurance industry posted an $8.2 billion net underwriting loss for the first three months of 2023, an $11.6 billion swing from the first quarter of 2022, according to research from AM Best.
Although net premiums written increased 14.7% year-over-year to $217 billion in Q1, it was not enough to counteract a 26.9% increase in losses and loss adjustment expenses. Catastrophe losses contributed 6.9 points to the industry’s 102% combined ratio for the quarter, up from 3.9 points in the prior-year quarter.
“The personal lines segment, specifically the homeowners line of business, was primarily responsible for the decline in underwriting results,” Best said in a June 14 “First Look” review.
The industry also saw a 29.7% decline in net investment income, which dropped pre-tax operating income down 70.7% to $7.5 billion. Net income also fell 70.7% to $8.1 billion.
Industry surplus rose 3.9% to $1 trillion from end-of-year 2022, but still remains 6.6% lower than in Q1 2022, Best reported.