Real EstateJul 29, 2024
US Home Insurers Faced a Record-Breaking $15.2B Net Underwriting Loss In 2023, Double The Previous Year
Climate Risk
Rhea Lobo
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We’re not meteorologists, but we’re pretty sure the insurance industry is feeling the heat. Last year, the US homeowners insurance sector recorded a net underwriting loss of $15.2B — its worst underwriting performance since at least 2000. This surge in losses is mainly attributed to the rising populations in disaster-prone areas, compounded by severe natural disasters, and increasing costs due to inflation.
Insured out of luck: According to American Property Casualty Insurance Association’s Robert Gordon, the insurance industry is currently grappling with surging coverage demands (a.k.a. asking your insurance to pay for something) as insured losses soar. The financial strain has led insurers to either withdraw from high-risk areas or raise premiums aggressively — making it increasingly difficult for homeowners to afford insurance. While 2023 was defined by record losses, AM Best is pessimistic about the future, stating, “A return to underwriting profitability for the segment over the near term is unlikely.”
