Insurers expected to continue profitability through 2024: Lockton

Commercial property/casualty insurers reported strong returns for the first quarter and are expected to remain profitable through 2024 and beyond, according to a report Thursday from Lockton Cos. LLC.

A group of six insurers all showed positive return on equity for first-quarter 2024, while five of the six posted gains in net written premium and achieved improved combined ratios compared with first-quarter 2023, report data showed.

Return on equity is forecast at 9.5% for 2024 and 10.0% in 2025, compared with 3.4% in 2023, Lockton said, based on data from the Swiss Re Institute.

Insurers continue to benefit from higher rates and investment income as well as exposure growth, the report said.

The pace of rate increases in the property market has slowed, and although liability rates continue to rise, “capacity remains plentiful” for most and pricing has become more “predictable,” the report said.

Pricing for directors and officers liability, employment practices liability and cyber insurance continues to fall, according to Lockton.

Liability lines are being increasingly vexed by civil litigation judgments over $10 million, dubbed “nuclear verdicts.”

In 2023, 89 such verdicts were awarded against businesses in U.S. courts, according to Marathon Strategies, the most since Marathon began tracking such data in 2009, the Lockton report said. Of those, 27 totaled more than $100 million.