US P&C Insurance Sees Record Profitability in 2024

The US property and casualty insurance industry saw remarkable improvements in 2024, with underwriting profitability returning after two years of losses. The industry recorded an underwriting profit of nearly $27 billion, marking a significant recovery from a net underwriting loss of over $20 billion in the previous year. This turnaround was largely driven by the private auto sector, contributing substantially to the industry's overall success, supported by higher interest rates bolstering investment income. Despite facing heavy natural catastrophe losses, particularly due to hurricanes and severe storms, the positive impact of rising premiums in personal lines has shown encouraging growth for the future.

In 2024, the industry’s combined ratio improved significantly from 101.8% to 96.6%, marking the most substantial yearly reduction since 2013. The private auto business demonstrated resilience, recovering to a net loss ratio of 65.8%, a notable drop from the previous two years of record high loss ratios. Major insurers such as Berkshire Hathaway, Progressive, and Allstate reported substantial net underwriting gains, with Berkshire Hathaway leading with a net underwriting gain of $12.20 billion.

The article highlights the mixed trends in commercial lines and notes that while some insurers faced underwriting losses, especially in liability and reinsurance, others adapted and improved their profitability. The competitive landscape is evolving, with companies increasing advertising spending to capture more market share, setting the stage for continued growth and profitability in the property and casualty insurance sector.