The National Association of Insurance Commissioners (NAIC) released a report this week on profitability in the property and casualty insurance industry, which found that total premiums earned increased in 2020.
NAIC’s Report on Profitability By Line By State in 2020 analyzes property/casualty insurance by state and line of insurance. It is designed to provide information that can be used to analyze competition and market performance.
The report revealed that total premiums earned increased in 2020, rising for the 11th straight year. Losses incurred and loss adjustment expenses remained relatively flat. The direct return on net worth for the total property and casualty insurance market decreased 2 percentage points to 6.6 percent in 2020.
Further, the report said that Private Passenger Auto (PPA) makes up a large portion of the Property & Casualty market, accounting for roughly 36 percent of the total direct premiums earned in 2020. The return for PPA increased over the prior year moving to 10.5 percent in 2020, up from 7.2 percent in 2019.
In addition, the report said that losses and loss adjustment expenses accounted for over 70 percent of direct premiums earned nationwide for all property and casualty lines combined over the past five years. Combined expenses accounted for approximately 26 percent of direct premiums earned during that time.
NAIC provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers.