U.S. Property and Casualty Insurers: Industry Loss Estimates Reveal Continued Challenges

Verisk & APCIA’s estimate of $21.1 billion in underwriting losses in 2023 shows the industry facing continued challenges from natural catastrophe events, inflation

Jersey City, NJ (June 1, 2024) – Verisk, a leading global data analytics and technology provider, and The American Property Casualty Insurance Association (APCIA), the primary national trade association for home, auto, and business insurers, have remarked on full-year 2023 losses for the insurance industry, which they estimate to be USD$21.1 billion. According to key financial indicators for private U.S. property/casualty insurers, 2023 followed similar trends in underwriting losses to those seen in a difficult 2022.

While the estimated industry net underwriting loss of $21.1 billion is lower than the $24.8 billion reported in the previous year, net income is at the lowest level it has been in more than 10 years. In 2023, it declined to $35.7 billion, compared to $44 billion in the preceding year, representing a 19 percent decrease.

Incurred losses and loss adjustment expenses for 2023 increased by 10.1 percent, while earned premiums grew by 9.9 percent. The combined ratio, a crucial measure of profitability for insurers, barely changed at 101.6 percent in 2023 versus 102.4 percent in 2022.

The preliminary results, as shown in the table below, represent consolidated estimates derived from annual statements submitted by insurers to insurance regulators. These results are based on approximately 96.9 percent of all business underwritten by private U.S. property/casualty insurers.

“Insurers experienced a second straight year of net underwriting losses with over $21 billion in red ink in 2023 following nearly $25 billion in 2022,” said Robert Gordon, senior vice president of policy, research, and international at APCIA. “While overall industry surplus – representing the supply capacity for insurance coverage – modestly increased in 2023 thanks to investment gains, it has still not recovered from the $72 billion contraction in 2022 and fell to a five-year low relative to premium revenue. Homeowners and auto insurance performed particularly poorly: in both 2022 and 2023, loss ratios exceeded levels not seen in more than 20 prior years. As insured losses skyrocket, many policyholders in the U.S. face rising insurance costs and availability challenges, which is why the insurance industry is analyzing these issues and advocating for solutions. However, the market won’t fully stabilize until insurers can close the gap between losses and rates.”

“Despite only one US landfalling hurricane in 2023, we saw elevated catastrophe activity. Severe convective storms were a key driver of underwriting results for the year, particularly in homeowners,” said Saurabh Khemka, co-president of underwriting solutions at Verisk. “On the premium side, the hard market and steady exposure growth have eased some of the pressures in commercial lines. However, even with another year of double-digit rate increases, rate adequacy continues to be a major challenge for personal auto driven by inflation, supply chain shortages, and labor shortages.”

In 2023, the policyholders’ surplus improved from Q3’s $950.8 billion to $1,014.8 billion; however, insurers’ rate of return on average policyholders’ surplus, a crucial component of overall profitability, decreased to 3.6 percent in 2023, down from 4.4 percent in 2022.

Fourth quarter sees year-over-year improvements in premiums and combined ratios, attributable to a sharp decrease in cat events.

In the fourth quarter of 2023, the industry’s net income increased to $18.8 billion, up from $10.6 billion in the same period of 2022.

  • While the first half of the year experienced record-breaking catastrophe activity, activity in the second half was below-average, most notably in the fourth quarter. Catastrophe losses for Q4 of 2023 were the lowest quarterly cat losses since 2015 and the fewest quarterly catastrophe events since 2016. Net written premiums increased by $17.9 billion in the fourth quarter of 2023, representing a growth of 9.7 percent compared to the previous year.
  • Net underwriting gains rose to $9.7 billion in the fourth quarter of 2023, rebounding from $3.7 billion in losses reported in the same quarter one year earlier.
  • The combined ratio improved from 103.0 percent in the fourth quarter of 2022 to 96.8 in the same period this year.

Note: The results above are based on annual statements filed with insurance regulators by private property/casualty insurers domiciled in the United States, including reinsurers, excess and surplus insurers, and domestic insurers owned by foreign parents, and excluding state funds for workers’ compensation and other residual market insurers, the National Flood Insurance Program, and foreign insurers. The figures are consolidated estimates based on reports accounting for about 96.6 percent of all business written by U.S. property/casualty insurers. All figures are net of reinsurance unless otherwise noted and occasionally may not balance due to rounding.

About Verisk

Verisk (Nasdaq:VRSK) is a leading strategic data analytics and technology partner to the global insurance industry. It empowers clients to strengthen operating efficiency, improve underwriting and claims outcomes, combat fraud and make informed decisions about global risks, including climate change, extreme events, ESG and political issues. Through advanced data analytics, software, scientific research and deep industry knowledge, Verisk helps build global resilience for individuals, communities and businesses. With teams across more than 20 countries, Verisk consistently earns certification by Great Place to Work and fosters an inclusive culture where all team members feel they belong. For more information, please visit www.verisk.com.


The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions-protecting families, communities, and businesses in the U.S. and across the globe.

Source: Verisk

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