U.S. Insurers Report $23.5 Billion Net Underwriting Loss
A new report from A.M. Best reveals that the U.S. property and casualty industry recorded a net underwriting loss of $23.5 billion for 2017, mainly due to an estimated $52.9 billion in catastrophe-related insured losses. Net income for the industry was relatively flat at $40.8 billion, down 1.7 percent from 2016. Even so, industry surplus rose 6.8 percent to $733.8 billion in 2017, driven by a $39.4 billion increase in unrealized capital gains, which was offset by a $17.5 billion decline in other surplus gains and a $4.4 billion increase in stockholder dividends.
The 2017 catastrophes were the main driver for the industry’s additional $18 billion in underwriting losses compared with the previous year, according to A.M. Best, and the $52.9 billion estimate of 2017 property and casualty industry catastrophe losses marks a 109.8 percent increase over 2016. The catastrophe losses account for an estimated 10 points on the industry's combined ratio, up from an estimated 4.9 points in 2016. The industry’s reported combined ratio deteriorated three points to 103.8 year over year and was the worst of the last five years.