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Best’s Special Report: Preliminary Nine-Month 2020 Results Show 86% Underwriting Income Decrease for U.S. Property/Casualty Industry

·2-min read

The U.S. property/casualty (P/C) industry’s net underwriting income fell by 86% in the first nine months of 2020 compared with the same prior-year period, largely due to increases in underwriting expenses and dividends to policyholders. This financial review is detailed in a new Best’s Special Report, titled, "First Look: 9-Month 2020 Property/Casualty Financial Results." The data is derived from companies’ nine-month 2020 interim statutory statements received as of Nov. 18, 2020, representing an estimated 97% of the total P/C industry’s net premiums written.

During the nine-month period, underwriting expenses increased by 4.4% as some P/C companies recorded policyholder credits as an underwriting expense rather than a reduction of premium. Dividends to policyholders rose $3.2 billion from the prior-year period, as other companies provided refunds in the form of dividend payments. These factors, along with a 2.3% rise in incurred losses and loss adjustment expenses, led to the sharp net underwriting income decline.

The nine-month 2020 combined ratio for the P/C industry weakened slightly by 0.7 percentage points from the prior-year period to 98.7. AM Best estimates that catastrophe losses accounted for 8.3 points on the combined ratio, up from an estimated 4.4 points during the same period in 2019. The decline in net underwriting income, combined with declines in net investment and other income, reduced pre-tax operating income by 17.1%. Tax expenses were lower, but a $4.4 billion drop in realized capital gains contributed to a decline of 25.2% in the industry’s net income from the prior-year period to $35.5 billion.

To access a copy of this special report, please visit

AM Best is a global credit rating agency, news publisher and data provider specializing in the insurance industry. The company does business in more than 100 countries. Headquartered in Oldwick, NJ, AM Best has offices in cities around the world, including London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

Copyright © 2020 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Matthew Coppola
Director – Corporate Data Management
+1 908 439 2200, ext. 5627

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644