Catastrophe Losses and Uncertainty from COVID Continue to Put Pressure on Rates and Profitability, New Triple-I/Milliman Report Shows


For immediate releaseMilliman: Jeremy Engdahl-Johnson, jeremy.engdahl-johnson@millimanTriple-I: Loretta Worters,


NEW YORK, Nov. 17, 2021—The property/casualty insurance industry will run at an estimated 101 combined ratio for 2021, slightly worse than what was projected three months ago, putting pressure on rates and profitability, according to the latest underwriting projections by actuaries at the Insurance Information Institute (Triple-I) and Milliman.The quarterly report, Insurance Information Institute (Triple-I) / Milliman P/C Underwriting Projections: 2021-2023, was presented on November 17 at an exclusive members only virtual webinar moderated by Triple-I CEO Sean Kevelighan.“The 2021 estimated combined ratio worsened from prior quarterly analysis, primarily because actual third quarter catastrophe losses exceeded expectations,” explained Dale Porfilio, FCAS, MAAA, Chief Insurance Officer, Triple-I. “Healthy premium growth is projected for 2021-2023 as a result of economic recovery and a hard market,” Porfilio said, noting, however, that “insureds will continue to face rate pressure from the uncertainty of the pandemic.”On the personal auto side, Porfilio said that the number of miles driven returned to 2019 levels, but riskier driving behaviors such as speeding and impaired driving have led to increased fatalities. “Loss pressures forecast for 2022 and 2023 will likely result in a return to pre-pandemic profitability levels.”Jason B. Kurtz, FCAS, MAAA, a principal and consulting actuary at Milliman – an independent risk-management, benefits, and technology firm – said that the hard market, defined as a period of increasing premiums and decreasing capacity, persisted in the third quarter, particularly in commercial product lines.Looking at the workers compensation line, Kurtz noted that underwriting profits will continue, although margins are shrinking. “The pandemic recession significantly impacted premium volumes, but we are finally seeing premium growth again with the economic recovery.” On the commercial auto side, it is forecasted that underwriting losses will continue through 2023, said Dave Moore of Moore Actuarial Consulting. “We believe social inflation is playing a role in these combined ratios remaining above 100% despite many successive years of steady rate increases,” he said, adding, “we continue to observe a significant rebound in premium growth due to the economic recovery and the hard market driving rate increases.”Moore added that the Triple-I will be publishing research later in the month on social inflation, funded by a Research Grant from the Casualty Actuarial Society (CAS). “We estimate social inflation increased Commercial Auto Liability claims expense by roughly $20B for accident years 2010 – 2019.”Michel Léonard, PhD, CBE, vice president, senior economist, and head of Triple-I’s Economics and Analytics Department, discussed the economic drivers of insurance performance for 2021 and going into 2022. Dr. Léonard noted that the insurance industry is expected to grow by 3.40% in 2021, 2.40% below U.S. real GDP growth of 5.80%. “This aligns with historical trends whereby the insurance industry declines less than the overall economy going into downturns but lags national averages during recoveries.” He added: “Going into Q4, as more 2021 data becomes available, the more cool-headed forecasts for overall U.S. growth and inflation have prevailed. While both remain higher than usual on a year-over-year basis, overall U.S. growth in particular is still falling short of making up for the growth lost to the pandemic over the last two years.” With the 2021 Atlantic hurricane season just about in the books, it is on track to be an above-average season with a total of 21 named storms (trailing only 2020 and 2005 for the most named storms in a single season on record), according to Dr. Philip Klotzbach, research scientist in the Department of Atmospheric Science at Colorado State University.Klotzbach, who is also a Triple-I Non-Resident Scholar, gave his updated projections for the 2021 hurricane season, which officially ends on November 30. He noted that the season had 7 hurricanes and 4 major hurricanes. “An average season has about 14 named storms, 7 hurricanes and 3 major hurricanes,” he said. “The most significant hurricane of the 2021 season was Hurricane Ida, which resulted in nearly 100 fatalities and $65 billion in total damage for the United States. In addition to devastating storm surge and strong winds near where the storm made landfall along the central Louisiana coast, Ida brought catastrophic flooding to the mid-Atlantic states, highlighting the significant impacts that hurricanes can generate well inland.” 

About MillimanMilliman 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 Milliman.

About Insurance Information Institute (Triple-I)Founded in 1960, the Triple-I provides objective, fact-based information about insurance while also being a trusted source of unique, data-driven insights which inform and empower consumers. We want people to have the information they need to make educated decisions, manage risk, and appreciate the essential value of insurance. We have more than 60 insurance company members, including nine of the 10 largest writers of property/casualty insurance in the United States. Our focus is to create and to disseminate information; we neither lobby on behalf of the insurance industry nor do we sell insurance.

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