The U.S. property and casualty (P&C) industry recorded a $22.9 billion net underwriting gain in 2024, according to a new AM Best report. 

It is the industry’s first underwriting profit since 2020, according to the report. It also claims the gain is a “substantial swing” from the $21.3 billion loss recorded in 2023. 

The First Look: 2024 U.S. Property/Casualty Financial Results report found the P&C industry’s combined ratio improved by 5 percentage points to 96.6 in 2024. Catastrophe losses accounted for an estimated 8.7 points on the 2024 combined ratio, which matches 2023. 

A 9.8% growth in net earned premiums offset a 2.1% increase in incurred losses, loss adjustment expenses, and a 9.8% rise in other underwriting expenses, the report says. 

“The turnaround in the personal lines segment was primarily responsible for the improvement in underwriting results,” the report says. 

The underwriting gain coupled with a 21.3% increase in earned net investment income drove pre-tax operating incoming up 123.5% to $109.3 billion. 

A combined $22.8 billion change in net realized capital gains at four Berkshire Hathaway Insurance Group companies contributed to the industry’s net income rising 80.9% from the prior year to $169.3 billion, the report says. 

Berkshire Hathaway’s operating earnings for Q4 2024 were $14.5 billion, up from nearly $8.5 billion the company made during Q4 2023, according to a company earnings report. 

Insurance underwriting saw the largest increase, with $3.4 billion reported in Q4 in comparison to $848 million reported during the same time in 2023. Insurance investment income also saw a massive increase in earnings, with nearly $4.1 billion recorded in Q4 compared to nearly $2.76 billion in Q4 2023.

“In 2024, Berkshire did better than I expected, though 53% of our 189 operating businesses reported a decline in earnings,” Warren Buffett, company chairman and CEO, said in his annual letter to shareholders. “We were aided by a predictable large gain in investment income as Treasury Bill yields improved and we substantially increased our holdings of these highly-liquid short-term securities. Our insurance business also delivered a major increase in earnings, led by the performance of GEICO.”

The AM Best report says the industry surplus rose from the end of 2023 to $1.1 trillion as a combined $174.1 billion of net income and contributed capital was reduced by a $12.9 billion change in unrealized losses, a $3.7 billion of other surplus losses and $85.9 billion of stockholder dividends. 

Data for the report is derived from annual company statutory statements received as of March 11, according to the report. It represents an estimated 97% of the P&C industry’s total net premiums written.

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