Cold temperatures, hot investments and sizing up a cosmic threat
Don't call it a comeback... but, despite the lingering red ink, it kinda is.
The U.S. property & casualty insurance industry was hit with a $2.6-billion underwriting loss in 2024, according to AM Best , but that marks a massive improvement from 2023’s $24.6-billion deficit. The key? Rate hikes and refined risk selection. Personal lines led the recovery, slashing losses as auto rates climbed and underwriting tightened. Home insurance remained under pressure, and commercial auto stood out as a sore spot with a 108.5 combined ratio.
Looking ahead, AM Best analysts said they expect continued gains in 2025, but insurers are making tough calls — including exiting states if rate approvals don’t align with reality.
The big question: Is this rebound sustainable?
Meanwhile, there’s a bright spot in in the financials. As Insurance Insider points out, fourth-quarter earnings show U.S. specialty carriers are still reporting strong underwriting profits, with top-line growth and favorable combined ratios. While some concerns linger — especially in property pricing — E&S casualty remains resilient, with leaders like Kinsale Insurance and W. R. Berkley Corporation bullish on sustained momentum. Even with some stock prices lagging in early 2025, long-term investor returns have been solid.
Could the ‘specialty Golden Age’ have more room to run?
In other notable insurance headlines, job losses continue to be a hot-button topic. The World Economic Forum predicts claims adjusters will be among the fastest-declining jobs by 2030, as artificial intelligence automates routine tasks. But don’t count out the human element just yet. Industry leaders say that technology is complementing, not replacing, adjusters — freeing them up for complex cases and policyholder service.
The challenge? Striking the right balance between efficiency and expertise.
“[As] some of the simpler, more routine tasks get automated, that’s creating a little bit of a relief valve for us in terms of the staffing that we need to do,” Crawford & Company 's Greg M. Smith explained. It also “frees up some time in their day…to provide policyholder service and empathy that people are looking for in a moment of truth during a claim.”?
At the same time, there's a growing gap between revenue expectations and hiring plans. A new study from The Jacobson Group and Aon finds that nearly three-quarters of insurers expect revenue growth, but only 55% plan to add staff. That’s actually an improvement from last year, but still a break from historical trends. Automation plays a role, but so do shifting underwriting strategies, fewer personal lines policies, and ongoing economic uncertainty.
For personal lines carriers, the picture is even starker — nearly a third expect workforce declines. Instead of permanent hires, some are leaning on temps to handle claims during catastrophe events. Involuntary turnover remains double historical norms, as companies fine-tune performance expectations and adapt to operational efficiencies.
Our industry has had to grapple with plenty of disasters lately, but... a city-destroying asteroid? With a 3.1% chance of impact in 2032, Asteroid 2024 YR4 has sparked a fresh debate over whether insurers should still cover damage from falling space debris. While policies currently do, some argue that once a strike becomes predictable, it’s no longer an insurable risk. For now, the odds favor Earth dodging this one. But if an asteroid does hit, who ends up footing the bill? Hopefully that question won't need answering anytime soon.
Asteroids might pose some far-off, unlikely risk, but wild weather is what we're grappling right now, and this week has been absolutely brutal. Millions across the U.S. are battling a deep freeze, with temperatures hitting all-time lows in some cities.
The good news... we're warming up in a big way heading into the weekend. Enjoy it while it lasts, folks, because winter ain't giving up that easily, according to the latest forecast!