Best’s Special Report: Homeowners, Personal Auto Results Propel Underwriting Improvements in US Property/Casualty Industry Through Third-Quarter 2024

Through the third quarter of 2024, the direct incurred loss ratios for the homeowners/farmowners and private passenger auto lines of business improved significantly year over year, with the homeowners’ line experiencing a 13.8-percentage point improvement, according to a new AM Best report.

These results are detailed in a new Best’s Special Report, titled, “3Q24 Snapshot: Personal Lines Propels Improvement in Direct P/C Industry Underwriting Results,” and the data is derived from companies’ third-quarter statutory statements received and aggregated for the US property/casualty industry as of Jan. 6, 2025.

According to the report, through the first nine months of 2024, the U.S. property/casualty industry reported significantly improved direct underwriting results, driven by increased earned premiums, which have outpaced the rise in incurred loss and loss adjustment expenses, and other underwriting expenses. The personal lines segment saw the most notable improvement, benefiting from an aggressive push for more adequate rates, pricing segmentation in personal auto, the impact of underwriting initiatives and improved catastrophe risk management practices.

“Despite four hurricanes making landfall in the third quarter of 2024, including Hurricane Helene, the property/casualty industry’s direct loss ratio for the first nine months was 5.4 percentage points better than the same prior-year period,” said David Blades, associate director, Industry Research and Analytics, AM Best. “Although that provides optimism for full-year direct and net results, Hurricane Milton, which occurred in the fourth quarter, is expected to have a greater impact on homeowners and commercial property results than Helene. Additionally, a fuller picture on the impacts of the ongoing wildfires in California on the industry won’t be known until first-quarter 2025 results are available in late spring.”

The personal auto segment’s direct loss ratio through third-quarter 2024 improved by nearly 10 percentage points and experienced an industry-leading 14% increase in direct premiums written. Direct premiums written across the property/casualty industry were up by 9.1% compared with the same period in 2023, slightly below the 10.2% increase through third-quarter 2023.

“The workers’ compensation line was the only line of business to see a measurable decline in direct premium through the first nine months of 2024, reflecting the downward pressure that long-term favorable underwriting results continue to have on prevailing rates across most states,” said Helen Andersen, industry analyst, AM Best. “Overall, social and medical inflation on claim costs continue to impact the margins for general liability underwriters negatively.”

To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=350668.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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