The insurance industry is forecast to move to an underwriting loss in 2022 after four years of slim underwriting profits as personal lines loss trends, particularly in auto and homeowners, weigh upon comparatively better commercial market performance, according to a panel speaking Thursday in New York at the Insurance Information Institute’s Joint Industry Forum.
Inflation has led to a general doubling of replacement costs for sectors such as automotive and housing, with material and labor shortages and supply-chain delays all part of the equation, according to Michel Léonard, chief economist and data scientist, head of the economics and analytics department, for the institute.
The resulting increase in loss trends across the insurance business will swing the industry to an underwriting loss with a projected combined ratio of approximately 105% in 2022, this after hovering around 99% and thus reflecting a small underwriting profit from 2018 through 2021, according to Dale Porfilio, chief insurance officer for the institute.