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Private U.S. property/casualty insurers’ net income rose slightly to $61.9 billion in 2021 from $60.3 billion in 2020, but the groups’ combined ratio deteriorated to 99.6% from 98.6%, according to a report released Thursday by Verisk Inc. and the American Property Casualty Insurance Association.
The group saw $3.8 billion of net underwriting losses in 2021 after netting $5.2 billion of net underwriting gains in 2020, the report said. An $11.3 billion underwriting loss in the third quarter more than fully offset underwriting gains in other quarters.
Net written premiums increased 9.2% to $710.6 billion from $650.4 billion in 2020, while Insurers’ net investment income rose to $54.3 billion from $51.7 billion.
Losses and loss adjustment expenses, however, climbed 11.1% to $496.9 billion, while earned premiums grew only 7.4% to $685.0 billion.
“Although insurers’ net earned premium increased 7.4% … losses and loss adjustment expenses grew at an even faster rate to 11.1% in 2021, causing an underwriting loss for the year,” Robert Gordon, senior vice president, policy, research & international for APCIA, said in a statement with the report.
While private U.S. insurers’ losses and loss adjustment expenses from catastrophes dropped to $56.3 billion in 2021 from $61.4 billion in 2020, losses and loss adjustment expenses for losses other than catastrophes jumped 14.2% to $440.6 billion from $385.8 billion, led by personal auto losses.
Excluding mortgage and financial guaranty insurers, commercial lines insurers’ combined ratio improved 4.5 percentage points to 96.3% in 2021, while personal lines insurers’ combined ratio deteriorated 6.9 percentage points to 102.7%.