Property-Casualty Industry Loss Reserves Remain Redundant in 2022; Adequacy Level Slightly Down; Favorable Development Slightly Lower than Prior Year
August 14, 2023
HARTFORD, CT – August 14, 2023 – Conning’s annual study of the property-casualty industry’s loss reserves finds that the overall reserves remain redundant, and reserve adequacy levels vary considerably by line of business.
“The key lines contributing to the industry’s redundancy remain workers compensation, homeowners, and miscellaneous lines,” said Robin Davis, a Director of Insurance Research at Conning. “Reserve adequacy declined for most lines. The exceptions were workers compensation, other liability (occurrence and claims made), and medical malpractice occurrence where reserve adequacy improved in 2022.”
The Conning study, “2022 Property-Casualty Loss Reserves: Keeping Vigilant” reviews the property-casualty industry’s loss reserve position at the end of 2022, by line of business and in total. In the study, Conning includes estimated ranges of reserve adequacy levels for the industry and for small, midsized, and large insurance companies. Conning also discloses which companies contributed the largest amounts of favorable and adverse development for each line of business.
“The industry experienced favorable loss development of $3.4 billion in 2022, less than the favorable $6.0 billion prior year development in 2021,” said Scott Hawkins, the Head of Insurance Research at Conning. “This is the seventeenth consecutive year of favorable development from prior accident years, with more good news likely to follow in 2023. While reserves for the other liability line remain deficient, rate increases over the last several years have reduced the reserve deficiencies for this line. However, rate increases did not keep pace with rising costs in commercial auto liability. As a result, reserve deficiencies further grew for this line.”
“2022 Property-Casualty Loss Reserves: Keeping Vigilant” is available for purchase from Conning by calling (888) 707-1177 or by visiting here.
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Conning (www.conning.com) is a leading investment management firm with a long history of serving the insurance industry. Conning supports institutional investors, including insurers and pension plans, with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
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Insurance Research Team