AM Best reported that the U.S. property and casualty insurance sector rebounded in 2024, driven by a $31 bn improvement in the personal auto line.
This turnaround led to a $22 bn net underwriting gain, reversing the $23 bn loss recorded in 2023.
AM Best analyzed statutory filings submitted by insurers.
The data show that, after three consecutive years of underwriting losses, the personal auto segment returned to profitability in 2024, significantly affecting overall industry performance.
Despite ongoing challenges, the homeowners and farmowners segment reduced its underwriting loss to $2.1 bn in 2024, down from $16 bn in 2023.
This signals an improvement but still reflects ongoing pressure in that market.
The report also highlights a milestone: direct premiums written surpassed $1 tn for the first time in industry history. This growth reflects continued expansion in both personal and commercial insurance lines.
Analysts project that the P&C insurance sector will continue to face difficulties in 2025 due to volatile natural catastrophe risks.
However, the firm believes strong capital reserves, prudent risk management, and effective reinsurance strategies will help insurers absorb potential losses.
At its recent North American Insurance Conference, Fitch emphasized that the P&C industry remains highly exposed to large-scale natural disasters. Although recent years have seen multiple significant events, the market has not yet encountered a “mega catastrophe.”
While wildfires have left a lasting impact, hurricanes pose the greatest threat to financial stability. A direct hit by a major hurricane on Miami could lead to losses exceeding $100bn, while a large earthquake in Los Angeles or San Francisco could result in severe financial consequences.
U.S. P&C insurance market in 2024 is expected to show improved underwriting results, according to the Insurance Economics and Underwriting. P&C economic growth in 2024 ended slightly below U.S. GDP, at 2.3% versus 2.5% year-over-year (YOY). However, in 2025 and 2026, P&C growth is expected to outpace overall GDP, improving year-end expectations.
Commercial insurance lines continued to show profitability in 2024. Commercial property insurance shifted from a $1.9 bn underwriting loss in 2023 to an $8.1 bn gain, supported by premium increases and better risk selection.
Workers’ compensation and other liability (claims-made) lines also reported gains, though with narrower margins than in prior years.
David Blades, Associate Director of Industry Research & Analytics at AM Best, attributed the sector’s improved results to persistent rate adjustments and greater use of technology and data analytics across underwriting, claims management, and pricing.
Persistent efforts to improve rate adequacy, combined with the benefits of the continued leveraging of technology and data analytics to supplement underwriting, claims handling and ratemaking finally bore fruit in 2024.
David Blades, Associate Director, Industry Research & Analytics, AM Best
However, he cautioned that underwriting gains—particularly in the homeowners segment—may not be sustainable in 2025, given the financial impact of California wildfires.
Christopher Graham, Senior Industry Research Analyst at AM Best, noted that the other liability occurrence line shifted negatively.
This category includes most umbrella and excess liability coverages. Graham explained that pricing in these segments is still adjusting to reflect recent loss trends, with large commercial auto claims placing pressure on profitability in excess and umbrella lines.
