AM Best Reports a $26.5 Billion Loss Among P&C Insurance Industry

The U.S. property and casualty (P&C) insurance industry posted a $26.5 billion underwriting loss in 2022 as personal auto
losses, and Hurricane Ian dropped the combined ratio to 102.7, according to a new report from AM Best.

The 2022 results represent a further drop of $21.5 billion, down from 2021’s underwriting loss and 99.7 combined ratio, the ratings agency said
in its “First Look: 12-Month 2022 U.S. Property/Casualty Financial Results” report.

The industry boosted its net premiums written by 8.4% to $751.6 billion in 2022, AM Best said. However, even solid premium
growth and a 21.4% drop in policyholder dividends could not counteract the industry’s nearly 14% increase in incurred losses
and loss adjustment expenses, along with a 6.2% jump in other underwriting expenses.

When excluding $3.8 billion in favorable reserve development and the lowest amount of reserve releases in the last five years,
the industry posted a 103.2 accident-year combined ratio. Catastrophe losses added 6.9 points to the 2022 combined ratio,
down from 7.7 points in 2021.

Policyholder surplus — a measure of the industry’s financial strength — dropped 6.7% to $951.9 billion by the end of 2022 from
1.02 trillion at the start of the year.

Net income decreased by 31.3% to $42 billion last year, as tax expenses and realized capital gains dropped 35.2% and 82.2%,

This research was conducted by AM Best, who evaluated annual statements from insurers responsible for an estimated 96% of all U.S. P&C net premiums written.

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