Best’s Special Report: Preliminary Results Show Some U.S. Property/Casualty Lines Still Challenged Despite Segment’s Overall Improvement

OLDWICK, N.J.--()--Although the U.S. property/casualty (P/C) industry’s bottom-line underwriting performance improved noticeably in 2019, several individual lines of business are struggling to generate better results in the face of natural catastrophes and wildfires. The financial results on each individual line of business, along with corresponding analysis, are detailed in a new Best’s Special Report, titled, “P/C Industry Snapshot: Performance Improved in 2019; Some Lines Still Challenged,” and the data is derived from companies’ statutory statements that were received by May 31, 2020.

According to the report, some P/C lines of business such as homeowners multiperil and commercial multiperil, as well as commercial property, saw some relief in 2019 with the absence of extraordinary wildfire, windstorm or flood activities. Nevertheless, loss creep attributable to accident-years 2017 and 2018 contributed to modest adverse loss reserve development in some lines, somewhat tempering the improvement in top-line underwriting results. Overall, the P/C industry saw an increase of almost 400% in net underwriting earnings to $4.4 billion, and the industry’s combined ratio improved marginally to 98.8.

Numerous factors specific to the commercial automobile, medical professional liability and general (other) liability (occurrence and claims-made) lines of business continue to pose notable challenges to underwriters of those lines of coverage. Each line’s combined ratio, excluding the claims-made portion of the other liability line, was more than 10 percentage points worse than that of the overall industry in 2019.

At the same time, key lines such as private passenger (i.e., personal) automobile and workers’ compensation are not without challenges, but their direct underwriting results remain profitable. However, the report notes that the impact of the COVID-19 pandemic will pressure workers’ compensation premiums, which are already threatening to shrink workers’ compensation profit margins. Additionally, the debate over COVID-19 claims qualifying for workers’ compensation coverage continues in many states, and the potential volume of claims could stress companies’ claim adjuster resources and overall claims handling operations.

To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=298057.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

Contacts

Maxwell Gilberg
Associate Analyst
+1 908 439 2200, ext. 5684
maxwell.gilberg@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Samuel Hanig
Senior Industry Analyst
+1 908 439 2200, ext. 5502
samuel.hanig@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

David Blades, CPCU
Associate Director, Industry
Research and Analytics
+1 908 439 2200, ext. 5422
david.blades@ambest.com

Contacts

Maxwell Gilberg
Associate Analyst
+1 908 439 2200, ext. 5684
maxwell.gilberg@ambest.com

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159
christopher.sharkey@ambest.com

Samuel Hanig
Senior Industry Analyst
+1 908 439 2200, ext. 5502
samuel.hanig@ambest.com

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644
james.peavy@ambest.com

David Blades, CPCU
Associate Director, Industry
Research and Analytics
+1 908 439 2200, ext. 5422
david.blades@ambest.com