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Insurance Rate Drive: US Underwriting Losses Reach 10-Year High

Intergrated Insurance Advisors discusses the impact of catastrophic losses and inflation in 2023 on insurance rates and industry

Record Property and Casualty Losses in 2023 Impact Underwriting

US Underwriting Losses Hit 10-Year High of $38 Billion, meaning more was paid in claims than taken in premium in 2023, leading to increased insurance rates in 2023 and 2024.

Key Take Aways for the US property & casualty insurance industry:

  • Underwriting loss was $38 billion in 2023, a 10-year high.
    • Underwriting loss is the amount of money an insurance company pays in claims which exceeds the amount of money they take in premium.
  • Overall $65 billion in CAT losses in 2023
    • CAT losses are a catastrophe loss due to a severe event that causes losses that are higher than usual.
    • Typically hurricanes, floods, earthquakes
  • $35 billion in CAT losses in 2023 were secondary: Hail, Tornado, Thunderstorms, Wildfires
    • This almost double the annual amount.
  • Besides the number and severity of incidents, inflation seen in rising property replacement values and higher repair costs also contributed.

Interesting Facts

  • State Farm’s underwriting loss was $14 billion in 2023, the highest ever.
  • State Farm’s non-auto losses grew by 40% or $8 billion from 2022 to 2023.

Reference Article

U.S. P&C Underwriting Losses Hit 10-Year High of $38 Billion

Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial or professional advice.