Property-Casualty Industry Performance Improved Significantly in 2024

The US property-casualty (P-C) insurance industry significantly improved its statutory underwriting performance and net earnings in 2024, according to Fitch Ratings.

In a new report, US Property/Casualty Market Update, Fitch said the US P-C insurance industry posted a 96.6 percent combined ratio in 2024 and a 5.2 percentage point improvement from a year earlier. The rating agency noted that despite elevated catastrophe losses, insurers' underwriting results benefitted from a notable improvement in personal lines and consistent commercial lines profits.

"The P-C industry returned to underwriting profitability in 2024, with a significant earnings improvement following [2] years with a combined ratio over 100 percent and below-average return on surplus," Fitch Senior Director Tana Marcom said in a statement.

While US P-C insurers' premium growth moderated from its 2023 level, it remains above historic levels, Fitch said. Continued strong growth in personal lines premiums, driven by large underwriting losses in recent years, along with moderating growth in commercial lines premiums, contributed to the US P-C industry's solid premium growth in 2024, according to the rating agency.

Fitch said it expects personal lines performance to experience modest deterioration this year due to higher claims severity in the automobile and homeowners' lines from inflationary tariff effects, offset partially by ongoing price increases. Commercial lines underwriting results might also narrow as social inflation remains a concern for liability insurers, the rating agency said.

"Adverse reserve experience in longer-tail casualty segments, including commercial auto and other liability, is likely to persist," a Fitch statement said. "Additionally, weaker economic growth from a trade war would reduce demand for commercial insurance."