The US property and casualty (P&C) insurance industry saw a significant improvement in its 2024 results, with momentum expected to continue into 2025, despite an estimated net underwriting loss of $2.6 billion in 2024, according to a recent AM Best report.
AM Best attributes part of this progress to higher interest rates, which have fueled stronger investment yields for insurers, helping offset weather-related losses.
The report noted that in 2023, the US P&C insurance industry recorded an underwriting loss of $24.6 million, offset by net investment income of $72.4 billion.
While underwriting losses eased in 2024, AM Best estimates the industry’s collective net investment income grew to $85.4 billion and is expected to reach $100.8 billion in 2025.
Commercial lines underwriting results benefited from positive rate momentum across most business lines, while personal lines improved due to pricing, claims-handling initiatives, and better risk selection.
In 2024, the personal auto and homeowners lines ended the year with an estimated combined ratio of 101%, an improvement from 2023, when personal lines posted a ratio above 107%.
Greg Williams, Managing Director at AM Best, said, “On a net basis, both the homeowners multiperil and private passenger auto businesses generated more favorable loss ratios through year end, reflecting the aggressive push for rate adequacy among primary personal lines insurers since early 2022.”
AM Best projects a 7.3% increase in net premiums written for the P&C industry in 2025, following an estimated 10% rise in 2024. Personal lines net premiums are estimated to have grown 12.9% in 2024, with a projected 9% increase in 2025.
“Insurers are more determined than ever to achieve the rate increases necessary to address their calculated rate needs, particularly for the lines of coverage such as private passenger auto and homeowners multiperil,” Williams added.
