"Looking Forward": Reasons for Optimism for the P&C Industry in 2021

According to a presentation from Dr. Robert P. Hartwig, of the University of South Carolina, Darla Moore School of Business,  “Looking Forward, Looking Back: The Shifting Landscape for Insurers in 2021”, the impact of COVID-19 on the US Property and Casualty (P&C) industry has been that the “[w]orst case scenarios have, so far, been averted."  

In fact, he summarizes that “an anticipated acceleration in the economic recovery in the 2nd half of 2021 should help restore most P&C exposures to pre-pandemic losses by mid-2022.”  As Dr. Hartwig details, the impact of the pandemic on US P&C has in many categories been less severe than the Great Recession of 2009. He notes that because the P&C industry entered the pandemic from a “position of strength", it was able to withstand a 9% surplus decline in Q1 2020 and end the year with a record surplus. 

While acknowledging the challenges and unknowns, the presentation also provides context and calculations for measured optimism about the P&C Insurance Industry in 2021. You can find his detailed analysis here: https://www.uscriskcenter.com/wp-content/uploads/2021/01/Shifting-Risk-Landscape-for-Insurers-in-2021-1-26-2021.pdf