Products

EMARKETER delivers leading-edge research to clients in a variety of forms, including full-length reports and data visualizations to equip you with actionable takeaways for better business decisions.
PRO+
New data sets, deeper insights, and flexible data visualizations.
Learn More
Reports
In-depth analysis, benchmarks and shorter spotlights on digital trends.
Learn More
Forecasts
Interactive projections with 10k+ metrics on market trends, & consumer behavior.
Learn More
Charts
Proprietary data and over 3,000 third-party sources about the most important topics.
Learn More
Industry KPIs
Industry benchmarks for the most important KPIs in digital marketing, advertising, retail and ecommerce.
Learn More
Briefings
Client-only email newsletters with analysis and takeaways from the daily news.
Learn More
Analyst Access Program
Exclusive time with the thought leaders who craft our research.
Learn More

About EMARKETER

Our goal is to unlock digital opportunities for our clients with the world’s most trusted forecasts, analysis, and benchmarks. Spanning five core coverage areas and dozens of industries, our research on digital transformation is exhaustive.
Our Story
Learn more about our mission and how EMARKETER came to be.
Learn More
Methodology
Rigorous proprietary data vetting strips biases and produces superior insights.
Learn More
Our People
Take a look into our corporate culture and view our open roles.
Join the Team
Contact Us
Speak to a member of our team to learn more about EMARKETER.
Contact Us
Newsroom
See our latest press releases, news articles or download our press kit.
Learn More
Advertising & Sponsorship Opportunities
Reach an engaged audience of decision-makers.
Learn More
Events
Browse our upcoming and past events, recent podcasts, and other featured resources.
Learn More
Podcasts
Tune in to EMARKETER's daily, weekly, and monthly podcasts.
Learn More

P&C insurers might see a rebound in 2023, but it won’t be all rainbows and butterflies

The news: The US property and casualty industry is expected to rebound in 2023 and 2024 from a trying 2022, per Swiss Re’s “US Property & Casualty outlook: sources of optimism from a difficult starting point” report. Here we review the industry’s performance in 2022 and look at what will drive and what will stall progress in 2023.

2022 in review: The P&C industry recorded a $26.9 billion net underwriting loss in 2022, more than six times the loss it experienced in 2021, per the American Property Casualty Insurance Association (APCIA)

  • The industry’s return on equity (ROE) came in at 2.5%, per Swiss Re. Profits were hit hard by persistent inflation and an outsized number of catastrophic events, including Hurricane Ian.
  • Net income fell to $41.2 billion last year, down 33.6% from 2021, according to the APCIA. The industry suffered losses in net investment income due to the realization of negative capital gains.
  • Earned premiums grew 8.3%, but that wasn’t enough to offset losses and loss adjustments, which increased 14.1%. The sector’s combined ratio worsened to 102.7%, from 99.6% in 2021.

To 2023 and beyond: Swiss Re’s report provides a more optimistic outlook for 2023, but we see some economic and natural forces affecting underwriting and reserves that could dent its forecast.

  • Profit: Swiss Re estimates that the US P&C industry’s profits will grow to roughly 8% in 2023, potentially climbing as high as 9.5% in 2024.
  • Underwriting: The sector’s combined ratio is expected to improve to 100% in 2023 and 98.5% in 2024. Inflation in the US is slowly declining, but it remains stubbornly present. The major underwriting risk insurers face this year is an increasing number of natural catastrophes (natcats). The first quarter of 2023 saw an above-average number of natcat claims, and climate-related disasters have tripled in the last 30 years.
  • Reserves: Inflation has eaten away at insurers’ reserves in 2022, which already faced depletion due to conservative estimates related to COVID losses in 2020 and 2021. Inflation is expected to continue gnawing at reserves in 2023, along with consumer-related changes in travel and work preferences.
  • Auto: Inflation has driven up the cost of cars and the cost of car repairs in 2022, which causes claim costs to rise. Car accidents are also on the rise. Forbes reported a 7% increase in fatal car accidents in the US between 2019 and 2020. But according to the March CPI, auto insurance premiums are up 15% YoY, meaning the subdivision could see generous profits in 2023.
  • Investment income: P&C insurers should enjoy increased investment income and rising recurring yields in 2023 as the Fed is expected to raise rates once again to between 5% and 5.25%.

The big takeaway: Insurers are beginning to feel the relief of the post-pandemic return to normalcy. But the recessionary outlook for the US means they’ll continue to face challenges, albeit relatively mild. High interest rates will assist in boosting profits, though inflation may take longer than expected to fall to the Fed’s targeted 2%. Insurers will also need to re-evaluate how they measure climate risk to ensure they are prepared to handle the risk of greater climate-related crises.

This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.