The United States property and casualty (P&C) industry reported an $8.2-billion net underwriting loss in the first quarter of 2023. During the same period in 2022, the industry reported a net gain of $3.4 billion.
The AM Best special report, entitled First Look: Three-Month 2023 Property/Casualty Financial Results, is derived from companies’ three-month 2023 interim statutory statements, as of May 30. AM Best says the report represents an estimated 98 per cent of total P&C net premiums written in the country.
“AM Best’s First Look report provides early insight into the current financial state of the U.S. property and casualty industry,” they write.
“The first quarter 2023 underwriting loss, driven predominantly by personal lines losses, coupled with a 29.7 per cent decline in net investment income, drove pre-tax operating income down 70.7 per cent to $7.5 billion,” the firm writes. “With tax expense and related capital gains down 39.5 per cent and 53.2 per cent respectively, the industry’s net income slid 70.7 per cent to $8.1 billion.”
During the period, net earned premiums grew 14.4 per cent while policyholder dividends declined 17 per cent. These were countered, they say, by a 26.9 per cent increase in incurred losses and loss adjustment expenses, and an 8.4 per cent rise in other underwriting expenses. “The personal lines segment, specifically the homeowners’ line of business, was primarily responsible for the decline in underwriting results.”
The industry’s surplus increased 3.9 per cent from the end of 2022 to finish at $1 trillion.