P/C industry expected to return to underwriting profitability in 2024: S&P
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The U.S. property/casualty industry is forecast to produce an aggregate combined ratio of 100.8% in 2023 before returning to underwriting profitability with a sub-100% combined ratio in 2024, according to a report Thursday from S&P Global Market Intelligence.
The 2023 combined ratio of 100.8% marks an improvement from 102.6% in calendar-year 2022, but both remain above the 100.0% threshold that serves as the break-even point for underwriting profitability, S&P said.
The report also projects double-digit growth in direct premiums written across the property/casualty business in 2023 as “corrective actions employed by carriers in the private auto as well as the residential and commercial property insurance businesses translate into robust premium growth,” S&P said.
The 2022 private auto combined ratio of 112.2% topped the previous 25-year high of 111.8% in 2000, S&P said, adding, “In 2023, we project the most rapid growth in private auto direct premiums written in at least the last 25 years,” Tim Zawacki, principal research analyst, S&P Global Market Intelligence, said in a statement with the report.
Commercial auto had a 105.4% combined ratio in 2022 after dipping below 100% in 2021.
In contrast, the workers compensation combined ratio of 83.9% was down nearly 3.3 percentage points from the 2021 result and ranks as the second-lowest result in the last 25 years, S&P said.
“We project double-digit growth in direct premiums written across the P&C business in 2023 in what would mark the first time in 21 years for such a level of expansion,” Mr. Zawacki said in the statement.
