US Property-Casualty Insurers Post $4.1 Billion 2021 Underwriting Loss

The US property-casualty insurance industry recorded a $4.1 billion net underwriting loss in 2021 as a result of increased losses and expenses, according to A.M. Best.

The US property-casualty insurers had posted a $6.7 billion gain in 2020, Best said.

Despite the 2021 underwriting loss, US property-casualty insurers were still able to increase their net income year over year by 4.5 percent, the rating agency reported.

The data are included in a March 9, 2022, Best's Special Report titled "First Look: 12 Month 2021 Property/Casualty Financial Results," and are derived from companies' annual statutory statements received by March 4. Insurers whose data are included in the report represent an estimated 96 percent of the US property-casualty industry's total net written premiums, Best said.

Best said the underwriting loss came despite 7.4 percent growth in the insurers' net earned premiums and a 45.4 percent decrease in policyholder dividends. But the industry also experienced an 11.7 percent increase in incurred losses and loss adjustment expenses and a 5.4 percent increase in underwriting expenses, the rating agency said. The US property-casualty industry's combined ratio weakened by 1.2 percentage points from 2020 to 99.6 percent in 2021.

A $7.2 billion increase in realized capital gains in 2021 contributed to the US property-casualty industry's net income of $63.6 billion for the year, an increase from $60.9 billion in 2020, Best said. The industry's surplus also increased by 13.6 percent in 2021 to $1.0 trillion.

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