Increased losses and expenses in the U.S. property/casualty industry during the first nine months of 2021 led to a $6.1 billion underwriting loss for the period, according to an AM Best report, released Nov. 29.
The financial review is detailed in a Best’s Special Report titled First Look: Nine-Month 2021 Property/Casualty Financial Results, and the data is derived from companies’ nine-month 2021 interim statutory statements that were received as of Nov. 17, representing an estimated 97 percent of the total U.S. P/C industry’s net premiums written.
According to the report, the P/C industry recorded 8.2 percent growth in net earned premiums and saw a 53.4 percent decline in policyholder dividends, compared with the nine-month period of 2020; however, it was offset by a 12.1 percent increase in incurred losses and loss adjustment expenses and a 5.9 percent increase in underwriting expenses. Despite a 7.8 percent increase in net investment income and an additional $1.4 billion in other income, the net underwriting loss reduced pretax operating income by 5.6 percent for the nine-month period. A $9.7 billion increase in realized capital gains contributed to industry net income increasing it by 21.0 percent over the prior year period to $42.4 billion.
The combined ratio for the industry weakened from the prior-year period to 99.5 percent. AM Best estimates that catastrophe losses accounted for 8.2 percentage points on the nine-month 2021 combined ratio, down from an estimated 8.4 points in the first three quarters of 2020.
To access the full copy of this special report, visit http://www3.ambest.com.