AM Best: US P&C industry swings to $22.9 billion net underwriting profit in 2024

By David Bull

March 18 - (The Insurer) - The personal lines segment drove the U.S. property casualty industry to deliver its first underwriting profit since 2020 with a $22.9 billion gain last year, more than reversing the $21.3 billion loss recorded in the prior year, according to statutory data compiled by AM Best.

The industry’s combined ratio improved by 5.0 points to 96.6%, with the contribution from cat losses flat at 8.7 points. The reported accident-year combined ratio, excluding $2.0 billion of favourable reserve development accounting for –0.4 points on the combined ratio, also improved by 5.0 points, to 96.8%.

The data, compiled from annual statutory statements from companies received as of March 11, 2025, represents an estimated 97% of the total P&C industry’s net premiums written and 96% of its policyholder surplus.

AM Best reported the U.S. P&C market booked growth of 9.8% in net earned premiums to $879.1 billion, offsetting a 2.1% increase in incurred losses and loss adjustment expenses to $624.4 billion and a 9.8% increase in underwriting expenses to $227.9 billion.

“The turnaround in the personal lines segment was primarily responsible for the improvement in underwriting results,” said the ratings agency.

Industry net premiums written (NPW) climbed 8.7% to $908.2 billion with homeowners and personal auto among the lines seeing significant increases.

NPW from the homeowners multiple peril line of business climbed from $124.0 billion to $140.8 billion, while NPW from private passenger auto physical damage increased from $131.9 billion to $150.7 billion.

AM Best said that the underwriting gain, together with a 21.3% increase in earned net investment income, to $85.2 billion, drove pre-tax operating income up 123.5% to $109.3 billion.

Meanwhile, a combined $22.8 billion change in net realized capital gains at a quartet of Berkshire Hathaway Insurance Group companies helped drive the industry’s net income 89.8% higher to $169.3 billion, compared to 2023.

That contributed to industry surplus increasing from $1.0 trillion to $1.1 trillion last year, as a combined $174.1 billion of net income and contributed capital was reduced by a $12.9 billion change in unrealized losses, $3.7 billion of other surplus losses and $85.9 billion of stockholder dividends.

AM Best noted that stockholder dividends were down 20% in part because of prior-year comparatives that included Berkshire Hathaway’s National Indemnity Company distributing $82 billion of other invested asset to its parent as a dividend recorded in 2023.

Last year’s performance by the P&C industry was equivalent to an after-tax return on surplus of 15.6%, up from 8.8% in 2023.