OLDWICK – SEPTEMBER 25, 2025 10:06 AM (EDT) AM Best-rated U.S. property/casualty (P/C) mutual insurance companies posted net income of $26.0 billion in 2024, as compared with a $10.8 billion net loss in 2023, according to a new report.
The new Best’s Market Segment Report, “Profitable Results for US Property/Casualty Mutuals Owed to Improved Rate Adequacy,” states that the improved 2024 results were aided by double-digit growth in net written and earned premiums due to insurers’ continued emphasis on achieving rate adequacy following several years of volatile operating conditions driven by the increased frequency and severity of weather-related activity, an ever-changing reinsurance market, growing inflation and swings in the equity markets.
“Although losses incurred remained flat from the prior year, underwriting expenses were up by approximately 8%, largely due to rising commission expenses given the segment’s higher premium levels,” said Lauren Magro, senior financial analyst, AM Best. “At the same time, fixed income securities continued to benefit from the higher interest rate environment, and net investment income for the segment increased by nearly 22% year over year.”
Even with the improved results, according to the report, the AM Best-rated P/C mutuals still have been impacted by severe weather. While the frequency of 2024 events remained in line with 2023, the severity of weather-related losses almost doubled. Secondary perils, including severe convective storms, continue to have a sizable impact as well. Uncertainty also remains regarding tariffs and the impact that this could have over the near term for mutual insurers.
While personal lines remain the largest segment in this population, commercial lines have been important for carriers’ diversification, as well as offering insureds a comprehensive range of products. However, the report notes that commercial liability lines also have the potential for volatility in results.
“Liability-related exposures still make up nearly 40% of the segment’s net premiums written. Social inflation, nuclear verdicts and higher claim defense costs have dampened results in these lines and could deteriorate loss reserves and operating results given the longer-tail nature of these lines,” said Janet Hernandez, senior financial analyst, AM Best.
Overall, the P/C mutual segment remains robust and financially sound. Despite adverse trends that insurers have faced through this time, mutual insurers have continued to put an emphasis on preserving capital, and over the past five-year period, market share has only changed slightly. With philosophies directed toward long-term financial success and serving their policyholders, mutual insurers continue to evolve and mature, better positioning themselves to adapt to emerging risks and market trends.
To access the full copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=358262.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.
Reprinted from AM Best.
