Blog: American Property Casualty Insurance Association assesses 2020 amid pandemic – Financial Regulation News – Financial Regulation News

American Property Casualty Insurance Association (APCIA) officials have offered an assessment of 2020 amid the COVID-19 pandemic, noting
property/casualty insurers weathered a turbulent year.

© Shutterstock

“Insurers’ net income and net written premium growth declined in 2020 as the industry was hit by the pandemic and severe natural catastrophe losses,” Robert Gordon, APCIA senior vice president, policy, research and international, said. “Investment yields fell to the lowest level since at least 1960. Insurers eked out a $5.1 billion underwriting gain on more than $650 billion of NWP after reserve releases, although that gain may not reflect the potential of significant long-tail losses from COVID-19. The drop in personal lines combined ratio is reflective of the drop in the personal auto combined ratio which is largely due to a temporary reduction in miles driven.”

Gordon acknowledged that while personal auto writers provided various rebates and significant rate reductions, the severity of claims continued to climb significantly, and miles driven increased in 2021.

APCIA officials indicated the analysis jointly prepared with Verisk (VRSK), a leading global data analytics provider, showed
private property/casualty insurers’ net income after taxes decreased 2.9 percent to $60.1 billion last year from $61.9 billion in 2019.

Additionally, insurers’ rate of return on average policyholders’ surplus fell to 6.8 percent from 7.8 percent in 2019, detailing insurers provided roughly $11.5 billion in premium relief to policyholders despite reporting a 5.6 percent decrease in net investment income caused by the lowest investment yield since 1960.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s