Life Insurance

How did the US P&C market fare in 2021? – report



The US property-casualty industry’s financial results through the third quarter of 2021 showed premium growth and deteriorating loss ratio, marking a “return to normalcy” following 2020, according to a report by AM Best. The report showed year-over-year growth in direct premiums written of 10%.

In its latest Best’s Special Report, AM Best also noted that the P&C industry’s direct loss ratio saw some deterioration, to 62.8 from 60.2 in the same period the previous year, as direct incurred losses increased by more than direct premiums written. In the first three quarters of 2019 – the last pre-pandemic year – the industry posted a direct loss ratio of 59.8.

“Although premium volumes have rebounded with the pandemic slowdown, natural catastrophe losses in 2021 were nearly double that of 2020, mainly from Hurricane Ida,” said Christopher Graham, senior industry analyst at AM Best.

Read next: US P&C insurance outlook marred

For specific lines including commercial auto and general liability, it is not yet certain whether premium growth has effectively countered rising loss costs and additional pressure from inflation, the report found. Auto and homeowners insurers are seeing pressure from inflation on their loss costs in everything from the costs of repairs and replacement or rental vehicles to the price of building materials. Underwriters of farm owners coverage could also feel the pinch of inflation on the cost of crop and equipment replacement, AM Best said.

“Growing inflation will likely affect the profitability of all major P/C lines of coverage, especially those insuring long-tail lines of coverage with significant outstanding reserves,” said David Blades, associate director of industry research and analytics at AM Best. “Trends related to social inflation and nuclear jury verdicts also could intensify those concerns.”

What's your reaction?

Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *