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For immediate release
Milliman: Jeremy Engdahl-Johnson,��jeremy.engdahl-johnson@milliman
Triple-I: Loretta Worters,��lorettaw@iii.org

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NEW YORK – Feb. 2, 2021��– A pandemic, civil unrest, and weather-related catastrophes impacted the U.S. property/casualty (P/C) insurance industry in 2020, but not to the extent that was originally feared.

Few predict a repeat of the events of 2020, yet new projections from the��Insurance Information Institute��(Triple-I) and����envision strong premium growth for 2021 with an underwriting result comparable to last year.

Despite myriad challenges, U.S. auto, homeowners, and commercial insurers are projected to realize a modest 1.9 percent growth in net premiums written and to book a combined ratio of 98.9 through year-end 2020, according to Triple-I and Milliman. This year, net premiums written will increase 6.1 percent, and the combined ratio will improve slightly, to 98.5, the two organizations project.��Net premiums written are premiums written after reinsurance transactions. The combined ratio is the percentage of each premium dollar a P/C insurer spends on claims and expenses.

“We think��the year ended surprisingly well, given the difficult circumstances the industry found itself in,” said James Lynch, FCAS, senior vice president and chief actuary, Triple-I.��“We project a slight underwriting profit in 2020, fairly similar to 2019. We project similar results over the next two years.”

The year-end 2020 projections, along with those for this year and next, were unveiled during an exclusive, Triple-I����virtual��webinar today, "Triple-I/Milliman Underwriting Projections 2021-2022: Groundhog Day Edition,"��moderated by Triple-I CEO Sean Kevelighan.

The webinar featured insights from a bevy of experts on what to expect in 2021, including Triple-I Non-Resident Scholar Phil Klotzbach,��Auto Insurance Report��editor Brian Sullivan and Jeff Eddinger, senior division executive at��the National Council for Compensation Insurance (NCCI). In addition, Dr. Michel��Léonard, CBE, vice president and senior economist, Triple-I, took a preliminary look at third quarter 2020 P/C insurance industry financial results using National Association of Insurance Commissioners’ (NAIC) data sourced from S&P Global Market Intelligence.

P/C insurance industry premium growth will rebound in 2021, the Triple-I and Milliman projected, as the hard market in commercial lines will augment exposure growth from the economic recovery. Panelists also forecast continued underwriting profits through 2022, with projections for several major lines of business.

“Economists expect growth to improve this year and next, which will fuel growth in exposures in most lines, ” said Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman, an independent risk management, benefits, and technology firm.

Kurtz noted, however, that recent signs of slowdown are “concerning – retail sales fell in December, adjusted for the season and new jobless claims remain stubbornly high.�� So that may delay growth, as might the spread of so-called variant coronaviruses, which the CDC is expecting will dominate the cases in the spring.”

Dr. Klotzbach said there іѕ а 6-in-10 сhаnсе of an асtіvе hurricane season in 2021, соmіng off one of the mоѕt асtіvе in recent memory – 30 named storms.��

“Obviously, there is a tremendous amount that can change between now and when hurricane season starts on June 1,” said Dr. Klotzbach, who is research scientist in the Department of Atmospheric Science at Colorado State University.��“But currently we do have a moderate strength La Niña event,” a pattern where сооlеd Pacific Oсеаn tеmреrаturеѕ соrrеѕроnd with warmer tеmреrаturеѕ, whісh ѕuрроrt mоrе ѕtоrmѕ аnd hurrісаnеѕ іn thе Аtlаntіс. “We’ll have a lot more to say when we put out our 2021 hurricane projections in April.”

Sullivan, also the owner of��, looked at both personal and commercial auto insurance.�� “For the first nine months, private passenger auto liability written premium was down less than two percent, but losses incurred were down more than 14 percent with loss ratios likely to be in the mid-50s.”

On the commercial side, Sullivan noted that the trends for commercial auto aren’t as powerful as personal lines. “Things have gotten better in terms of losses, but not that much better; certainly, nothing like personal auto,” Sullivan said.

Eddinger gave an early look at 2020 results for workers compensation insurance. “The pandemic has landed the U.S. economy into a recession. Significant job losses combined with changes in wage and rate levels have put downward pressure on premiums.�� NCCI estimates that private carrier net premium written will be down about 8 percent for 2020.”��

Eddinger noted that as the virus began to spread in 2020, so did the concern that COVID claims could overwhelm the system. “Fortunately, that has turned out not to be the case. At the same time, there has been a drop in non-COVID claims, due in part to more remote work and less work-related driving. So far, incurred losses have decreased about 8 percent, in line with the drop in total premium. As a result, the estimated calendar year combined ratio for 2020 is almost unchanged from 2019 at 86. This would be the seventh straight year of underwriting profit for workers compensation.”

The industry is financially strong but continues to face uncertainty, Eddinger warned. “The vaccine roll out has begun, but new cases of the virus in the U.S. have soared to record levels.�� In addition to COVID claims, industry leaders are concerned about regulatory activity related to presumptions, the economic downturn and the long-term impact of working from home,” Eddinger said.

The U.S.’s P/C insurers turned in a profitable performance in 2020’s third quarter even as the industry’s net income dropped 26 percent for the second quarter in a row, according��to��Dr.��Léonard.��“While it was below the 10-year average,��it was overall stronger than expected given the structurally low-rate environment yields and equity market volatility.”

Léonard concluded:��“Prudent asset management and sound underwriting practices ensured the continued financial stability of the industry even as we faced a uniquely challenging year, delivering on our contribution to systemic financial stability and commitment to policyholders.”��

About Milliman
Milliman is among the world's largest providers of actuarial and related products and services.��The firm has consulting practices in healthcare, property & casualty insurance, life insurance and financial services, and employee benefits.��Founded in 1947, Milliman is an independent firm with offices in major cities around the globe.�� For further information visit��.

About Insurance Information Institute (Triple-I)
Founded in 1960, the Triple-I, an affiliate of The Institutes, provides objective, fact-based information about insurance while also being a trusted source of unique, data-driven insights which inform and empower consumers. The Triple-I wants people to have the information they need to make educated decisions, manage risk, and appreciate the essential value of insurance.

The Triple-I has a full library of educational videos on its��. Information about Triple-I mobile apps can be found��.