Resilience of U.S. Property/Casualty Insurers Amidst Market Challenges

In its recent analysis, AM Best underscores how U.S. property/casualty (P/C) insurers achieved improved underwriting and operating results despite facing AI-driven prior authorization delays and severe weather impacts. These developments illustrate the industry's resilience and adaptability in a decade marked by volatility, with noticeable enhancements in underwriting performance.

Specifically, the underwriting expense ratio has shown significant progress between 2014 and 2024. The latest figures reveal that the P/C segment’s combined ratio fell by 5.1 percentage points to 96.6. This improvement is attributed to a 5.4-point reduction in the loss and loss adjustment expense ratio, reflecting better regulatory compliance management and strategic pricing initiatives.

Industry-standard factors, including economic shifts and climate challenges, notably influenced the loss and loss adjustment expense ratios, prompting insurers to prioritize premium adequacy. Lines such as homeowners, private passenger auto, commercial auto, and general liability have reported notable increases in claim costs.

Industry Insights and Future Outlook

David Blades, Associate Director at AM Best, commented that insurers navigated through market turbulence, achieving financial improvements in 2024 regarding underwriting and operating results. He noted that personal lines insurers had the most significant progress after facing adverse outcomes in previous years.

For further insights and the comprehensive report, visit AM Best’s website. Recognized globally as a leading credit rating agency, AM Best provides critical data analytics for the insurance industry across over 100 countries.

For inquiries, connect with David Blades at +1 908 882 1659 or [email protected], Alexander Winant at +1 908 882 1982 or [email protected], Christopher Sharkey at +1 908 882 2310 or [email protected], or Al Slavin at +1 908 882 2318 or [email protected].