The US property and casualty (P/C) insurance industry reported its first underwriting profit since 2020, recording a net underwriting gain of $22.9 billion in 2024, according to an AM Best report.
This represents a shift from the $21.3 billion underwriting loss in the previous year.
The findings are outlined in AM Best’s report, “First Look: 2024 US Property/Casualty Financial Results,” based on annual statutory statements submitted by March 11, 2025. The data represents approximately 97% of the industry’s total net premiums written.
The industry’s combined ratio improved by 5.0 percentage points to 96.6 in 2024. Catastrophe-related losses accounted for 8.7 percentage points on the combined ratio, remaining consistent with 2023.
The report attributes the improvement in underwriting results largely to developments in the personal lines segment. A 9.8% increase in net earned premiums helped offset a 2.1% rise in incurred losses and loss adjustment expenses, as well as a 9.8% increase in other underwriting expenses.
Despite ongoing challenges in the personal lines segment, issuer credit rating downgrades for P/C insurers declined in 2024. A separate AM Best report states that downgrades fell to 43 from 55 the previous year.
Read more: US P/C insurers get ratings boost
Pre-tax operating income rose 123.5% to $109.3 billion, driven by the underwriting gain and a 21.3% increase in earned net investment income. Net income for the industry reached $169.3 billion, up 89.8% from the prior year. A $22.8 billion shift in net realized capital gains at four Berkshire Hathaway Insurance Group companies contributed to the overall income growth.
Industry surplus grew to $1.1 trillion by the end of 2024. This increase resulted from a combined $174.1 billion in net income and contributed capital, partially offset by a $12.9 billion change in unrealized losses, $3.7 billion in other surplus reductions, and $85.9 billion in stockholder dividends.
With underwriting profitability returning after several years, how do you think the industry will navigate future risks and market conditions? Share your thoughts in the comments.
