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U.S. property/casualty (P/C) insurers made substantial profits in 2020, accumulated record- breaking surplus (increasing to $914 billion), paid “far less” in pandemic-related claims than they once insisted they’d be paying, and are still hitting struggling policyholders with huge rate hikes. Leslie Scism, “AIG’s Profit Rises on Premium Growth, Investment Gains,” Wall Street Journal, May 6, 2021; Fitch Ratings, “U.S. P/C Insurers Report 2020 Underwriting Profits Despite Costs of COVID-19: Fitch,” Insurance Journal, April 12, 2021 (“pricing continues to increase at a level unseen since 2003”).
Across the board, companies reported large profits, extending into 2021. Angela Childers, “Liberty Mutual reports sharply higher profit despite cat losses,” Business Insurance, May 6, 2021; Leslie Scism, “AIG’s Profit Rises on Premium Growth, Investment Gains,” Wall Street Journal, May 6, 2021; Claire Wilkinson, “Travelers reports 22% Q1 profit gain despite cat losses,” Business Insurance, April 20, 2021; Leslie Scism and Allison Prang, “Travelers More Than Doubles Quarterly Income,” Wall Street Journal, October 20, 2020 (“Property-casualty insurer Travelers Cos. more than doubled its net income in the third quarter, benefiting from auto policyholders driving fewer miles and increased premium rates.”)
This profit was made, in part, off the backs of small businesses owners whose “business interruption” insurance claims were largely rejected by insurers. “Moody’s Says COVID-19 Impact on P&C Insurance Sector Was ‘Moderate,’” Claims Journal, May 24, 2021 (“Businesses have filed about 1,700 business-interruption claims because of COVID-19 shutdowns, but those cases are largely being decided in favor of insurers, Moody’s said”); Noor Zainab Hussain and Suzanne Barlyn, “Travelers Insurance Profit Soared in Q4 on Fewer Claims, Investment Gains,” Insurance Journal, January 21, 2021.
Large premium increases, which began before the pandemic, grew through 2020, and are continuing, have greatly contributed to industry profits. Gavin Souter, “Property/casualty insurance prices keep rising,” Business Insurance, April 6, 2021,; Matthew Lerner, “Global prices rise 22% in Q4: Marsh,” Business Insurance, February 4, 2021, (“Global commercial insurance prices rose 22% in the fourth quarter of 2020, the largest year-over-year increase in the Marsh Global Insurance Market Index since its inception in 2012”); Claire Wilkinson, “Chubb’s Q4 profit doubles,” February 3, 2021, Business Insurance, (“We had … excellent financial results, headlined by rapid premium revenue growth and margin improvement — a trend we are confident will continue”); Leslie Scism and Allison Prang “Travelers Profit Increases 50%, Fueled by Car-Insurance Unit,” Wall Street Journal, January 21, 2021.