Last week, two insurance industry reports revealed that the overall property & casualty insurance industry is returning to profitability after years of hard market conditions and the continued impact of increasingly costly natural disasters and weather-related losses.

First, Verisk and the American Property Casualty Insurance Association (APCIA) reported that U.S. p&c insurers recorded an underwriting gain of $24.8 billion in 2024, showing significant improvement compared to the underwriting loss of $21.8 billion recorded in 2023.

This is the first full-year underwriting gain reported in four years, the report said, noting that the improvements can be attributed to premium increases to better match levels of risk.

"While many of the loss drivers of 2023 persisted into 2024, the industry's ability to bring premiums closer to the requisite levels has led to an underwriting gain for the first time since 2020," said Saurabh Khemka, co-president of underwriting solutions at Verisk. "However, the broader market continues to face challenges, particularly in property coverages, where the impact of natural catastrophes remains a defining issue."

“The increasing frequency and severity of these events reflect shifting weather patterns and evolving risk landscapes, underscoring the growing complexity of underwriting in the property & casualty space," he added.

2024 was a bad year for catastrophes. Natural catastrophe losses in the U.S. in 2024 hit $112.8 billion, according to Aon. Meanwhile, the annual average insured losses from natural catastrophes between 2017 and 2024 stood at $146 billion, according to GallagherRe.

“The property casualty insurance industry continued to stabilize in 2024, with a swing from close to a $22 billion net underwriting loss to a nearly $25 billion net underwriting gain," said Robert Gordon, senior vice president, policy, research and international, at APCIA.

However, despite a return to profitability, headwinds continue to impact the p&c insurance market, particularly the personal lines segment.

“By this time next year, homeowners insurers will have likely reported seven consecutive years of net underwriting losses, including record insured losses caused by the California wildfires this January," Gordon said. “Personal auto insurance loss ratios improved in 2024 but continue to be impacted by rising inflation and legal system abuse, and proposed tariffs could result in an estimated additional $7-$24 billion in annual auto insurance claims costs."

Meanwhile, AM Best said the industry left 2024 with a $22.9 billion net underwriting gain, having booked an underwriting loss of $21.3 billion in 2023. This means that the industry combined ratio for 2024 was 96.6 compared to 101.6 the prior year.

This exceeded expectations from a larger report on the U.S. p&c segment released last month, which estimated U.S. property & casualty insurers would post an underwriting loss of $2.6 billion for 2024.

Will Jones is IA editor-in-chief.