A report generated by the American Property Casualty Insurance Association (APCIA) and the data analytics provider Verisk examined the performance of property and casualty insurers.
The analysis showed improved income amid economic activity resumption drives growth in premiums and losses.
“Net written premiums increased 7.5 percent in the first half of 2021, as insurers experienced similar increases in losses and loss adjustment expenses (LLAE) from ongoing record wildfires, floods and freezes, a spike in ransomware attacks, worsening inflation and spiraling litigation costs,” said Robert Gordon, APCIA senior vice president, policy, research and international. “While insurers benefited from a positive swing in net realized capital gains, the industry faces ongoing headwinds from climate change, significant deterioration in auto claims severity, growing cyber liability exposure, and emerging losses from the impacts of long-haul COVID.”
Gordon noted as the pandemic unwinds, the industry has enhanced its balance sheet to protect consumers against increasing natural and man-made catastrophic exposures.
“We clearly see the imprint of the pandemic on the industry’s performance through the first half of 2021,” Neil Spector, Verisk president of ISO, said. “Economic activity that was suppressed for much of the first half of 2020 has sprung back, bringing its own set of challenges. Rising material costs and acute labor and supply chain shortages in many sectors create a powerful need for accurate, continuously updated sources of underwriting data to help insurers manage a dynamic risk environment.”
The report revealed insurers posted $17.5 billion in net income for the second quarter of 2021, which officials said represented an improvement over the $6.4 billion generated in the same time frame in 2020.