US Property-Casualty Industry Posted $8.2 Billion Q1 Underwriting Loss

The US property-casualty insurance industry experienced an $8.2 billion net underwriting loss during the first quarter of this year, according to A.M. Best. During the same period in 2022, the US property-casualty industry posted a $3.4 billion gain, the rating agency said.

Best examined the industry's first-quarter performance in a new Best's Special Report, First Look: Three-Month 2023 US Property/Casualty Financial Results. Data in the report is derived from the companies' 3-month 2023 interim statutory statements that were received as of May 30, representing an estimated 98 percent of the total property-casualty industry's net premiums written, Best said.

According to Best's report, the combined ratio for the US property-casualty industry deteriorated 6.1 percentage points to 102.0 percent during the first 3 months of 2023 compared with the same period in 2022. Catastrophe losses were responsible for an estimated 6.9 points on the 3-month 2023 combined ratio, Best said, three points higher than during the same period last year.

The rating agency said the first-quarter 2023 underwriting loss, which was driven largely by personal lines losses, along with a 29.7 percent decline in net investment income, drove US property-casualty insurers' pre-tax operating income down 70.7 percent to $7.5 billion.

Tax expense was down 39.5 percent over the period, while realized capital gains declined 53.2 percent, leading to a 70.7 percent decline in the US property-casualty industry's net income during the quarter to $8.1 billion.