U.S. Property/Casualty Insurance Market Stabilizes

The U.S. property/casualty insurance market is showing signs of stabilization, with improvements in net income and a decrease in price increases across coverage lines. A recent report indicates that the first quarter of 2023 saw the best underwriting results in over 15 years, attributed to a rising stock market and supply chain improvements. Commercial property buyers are experiencing moderate price increases and better terms, along with a significant rise in the popularity of parametric insurance, which is up 500% from the previous year.

Personal lines of insurance are also stabilizing, thanks to a sound reinsurance market and slowing inflation. Insurers are now focusing on profitability, leading to stricter underwriting practices. However, challenges persist in casualty lines and property insurance, especially due to the increasing frequency of extreme weather events. In 2023 alone, the U.S. had 25 weather-related disasters costing over $1 billion each, raising concerns about insurer profitability and rates.

Insurance companies are exiting markets deemed uninsurable due to high risks associated with catastrophic weather and regulatory challenges that limit rate adequacy. Despite growth in the P/C market, capacity, coverage, and pricing issues remain for certain industries as well as insurance product lines. Collaboration with insurers and brokers to manage risks and explore options for coverage is crucial for businesses in this evolving landscape.