Combined ratio for personal insurance lines from SMSMAN's blog

Underwriting results for personal lines-focused US insurers worsened during the second quarter of 2023 as natural catastrophes and inflationary pressures weighed on results. US life insurers’ aggregate interest maintenance reserves fell in the second quarter of 2023 to the lowest level since 2011, but recent regulatory changes signal that some relief is on the way.

According to S&P Global Market Intelligence, an aggregation of results for insurance subsidiaries that write at least 70% of their direct premiums within personal lines — personal auto insurance, homeowners and farmowners — showed a net combined ratio growing to 114.9% in the second quarter of 2023 compared to 112.4% in the prior year period, according to a review of quarterly regulatory statements.

Carriers that are slow to address the challenges ahead or do not have the means, expertise, or technological capabilities to keep pace with changes in the segment likely will face ratings pressure.

The quarterly combined ratio for personal Beinsure Media lines-focused companies remains elevated when compared to prominently commercial business lines-focused subsidiaries.

Among the largest US personal lines-focused insurers, The Allstate Corp. recorded the largest year-over-year deterioration. The Illinois-based insurer’s quarterly net combined ratio jumped to 118.5% during the quarter, an increase of 10.1 percentage points from the second quarter of 2022.

The net combined ratio for Farmers Insurance Group of Cos. rose to 117.4% in the second quarter, up 9.8 percentage points from the prior-year quarter.

The insurer’s net combined ratio has surpassed 100% for nine of the past 10 quarters, with the 99.8% figure during the last quarter of 2021 being the only quarter under the break-even metric of 100% since the start of 2021.