US P&C Insurance Industry Improves in 2024 Despite Underwriting Losses

The US property and casualty (P&C) insurance industry showed notable improvement in 2024, despite an estimated $2.6 billion net underwriting loss, according to a recent AM Best report. The industry benefited from higher interest rates, which drove stronger investment yields, partially offsetting weather-related losses. Net investment income grew from $72.4 billion in 2023 to an estimated $85.4 billion in 2024 and is projected to surpass $100 billion in 2025.

Underwriting results in commercial lines remained strong due to positive rate momentum, while personal lines improved through pricing adjustments, better claims management, and risk selection. The combined ratio for personal auto and homeowners insurance improved to 101% in 2024, down from over 107% in 2023, signaling better profitability. Insurers continue to push for rate adequacy, particularly in private passenger auto and homeowners multiperil coverage.

Looking ahead, AM Best forecasts a 7.3% increase in net premiums written for the P&C industry in 2025, following an estimated 10% rise in 2024. Personal lines premiums grew by nearly 13% in 2024 and are projected to increase another 9% in 2025. Insurers remain committed to securing necessary rate increases to sustain profitability amid ongoing market challenges.