Climate Impacts Drive US P&C Losses

In a report entitled “US Property/Casualty: Weather, Reinsurance and Inflation Drive Results – Again” AM Best says that more frequent and severe weather-related losses and upward reinsurance pricing, both of which are impacted in part by climate risks, pushed U.S. P&C net underwriting loss to a 10-year high of $38 billion in 2023.

AM Best estimates approximately $65 billion in catastrophe losses impacting the U.S. P&C industry’s underwriting results - including a record 28 catastrophe events with losses in excess of US $1 billion.

Notably, the majority of these losses resulted from secondary perils.

“The increasing volatility from what have been known in the industry as secondary perils raises the question of whether they will have a more primary role going forward,” said Sharon Marks, director, AM Best.

"Given the recent change in weather patterns, secondary perils have become more intense, resulting in higher losses for primary insurers due to higher retentions," said Daniel Ryan, senior director, AM Best. A video discussion of the AM Best report with Dan Ryan is available here.

Source: AM Best, https://news.ambest.com/pr/PressContent.aspx?altsrc=2&refnum=34466