Q3 Combined Ratio for US P/C Industry Highest in 5 Years


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According to an analysis by S&P Global Market Intelligence, the US non-life and real estate sector posted a combined ratio of about 106.6 in the third quarter – the highest in five years.

“In addition to the effects of catastrophe losses on several property insurance business lines, including private auto physical damage coverage, increased vehicle repair and replacement costs and longer time to settle auto insurance claims continued to weigh on the industry,” Tim wrote. Zawacki. , chief insurance analyst. “The current and previous accident years felt the impact of inflation, our analysis shows.”

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The combined ratio of the industry has not been this high since 2017, when hurricanes Harvey, Irma and Maria made landfall. The estimated Q3 result of 106.6 is higher than the 103.7 combined ratio of Q2 2022 and 104.5 of Q3 2021. In addition, according to S&P, the industry’s estimated underwriting loss for Q3 is $15 billion – a 20-year record quarters.

S&P Global Market Intelligence said the private auto business generated a direct accrued loss ratio of 84.7 in the third quarter, including results of 80.7 for the private auto liability lines and a whopping 90.4 in the private auto repair business.

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Extensive claims related to Hurricane Ian discounted third-quarter personal auto damage losses. While the data doesn’t indicate a breakout of catastrophe claims, private auto claims in the third quarter were about $2.3 billion higher than they would have been had the company had a loss ratio in line with the second quarter.

When looking at private car liability, results were impacted by an increase in frequency, higher medical costs and more court claims. S&P said its third-quarter loss ratio is the second highest in the past 21 years.

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“The data reinforces the urgency the industry has already shown around the implementation of rate increases for private auto companies,” said Zawacki. “It also speaks to the significant volatility that catastrophe losses continue to inject into quarterly results, even after accounting for significant hurricane reinsurance coverage.”

Real estate market in the US

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