S&P Global Market Intelligence expects the U.S. property/casualty insurance industry to post more than $100 billion of net incom
e for 2024—and that the biggest underwriting profits contributing to the figure will come from units of Berkshire Hathaway and Progressive.
The triple-digit aggregate industry net income figure will come from a combination of
sharply improved underwriting results, for personal lines, in particular, coupled w
ith the positive effects of higher interest rates on investment income, S&P GM
I said in a new report based on data compiled from property/casualty annual sta
tement filings with the National Association of Insurance Commissioners as of March 6.
This would mark the first time in a calendar year that the industry posted ne
t income over $100 billion, the report said, noting that the net income figure compares to $85.1 billion for 2023.
Estimating an overall combined ratio of 96.6 for 2024, compared to 101.8 for 2023 and 102.7 in 2022, S&P GMI said the industr
See more beautiful photo albums Here >>>
ywide underwriting profit will total almost $27 billion. “An approximate year-over-year swing of $47 billion from the industry’s seco
nd-consecutive net underwriting loss in excess of $20 billion” for the two prio
r years “has few historical precedents,” according to Tim Zawacki, insurance sector strategist at S&P Global Market Intelligence.
Ranking individual insurance companies based on underwriting profit, S&P GMI found that three U.S. P/C subsidiaries of Berkshire Hathaway Inc.—National Indemnity Co., GEI
CO General Insurance Co. and Government Employees Insurance Co.—were
the industry’s most profitable individual entities, while Berkshire Hathaway Gro
up overall recorded $12.2 billion of net underwriting profits on a statutory basis. (Individual company results are shown net of reinsurance, and National Indemnity’s results include a boost from reinsuring GEICO business, the report notes.)
Seven of the insurers showing the largest underwriting profits write primarily personal lines, including two Progressive entities—Progressive Direct Insurance Co. and Progressive Casualty Insurance Co.—along with Allstate Insurance Co., USAA Casualty and Farmers Insurance.
But writing personal lines wasn’t the secret sauce to move to underwriting profitability last year. While State Farm Mutual Automobile Insurance Co.’s net underwriting result improved the most of any insurer captured in the S&P GMI analysis, even with a $7.7 billion improvement the company still reported net underwriting losses of $2.1 billion, according to S&P GMI. That was the second-worst underwriting result in the industry, topped only by another State Farm entity—State Farm Fire and Casualty Co.
California-focused State Farm General Insurance Co. had the seventh-largest underwriting loss last year.