News + Notes: Record Q1 Statutory Underwriting Loss, Wisconsin RMI Students Win RIMS Challenge, and More

The latest announcements, partnerships and products that will have an impact on the insurance industry today.
By: | July 10, 2023

Record Q1 Statutory Underwriting Loss

According to S&P Global Market Intelligence, in Q1 2023, the U.S. property and casualty industry experienced its largest first-quarter net underwriting loss in 12 years.

Key findings from the preliminary analysis indicate that U.S. P&C insurers had a combined ratio of 102.2% and a net underwriting loss of $7.34 billion. In comparison, the same entities reported a combined ratio of 96.1% and a net underwriting profit of $4.27 billion in the corresponding period last year.

The report also revealed struggles for personal lines; the direct incurred loss ratio across the industry reached a record 74.8%. Natural catastrophes and ongoing inflation-related challenges in the private auto business were noted as the primary loss drivers.

Despite the underwriting loss, P&C insurers continued to experience robust top-line growth in Q1 by pursuing rate increases in response to rising private auto loss costs and incorporating higher residential property replacement costs into premiums. Carriers also benefitted from resilient pricing in certain commercial lines of business.

The 2023 Spencer-RIMS Challenge Winner

A team of risk management and insurance students from the University of Wisconsin-Madison was chosen as the winner of this year’s Spencer-RIMS challenge at RISKWORLD in Atlanta.

Twenty-four collegiate teams from around the world were given the opportunity to devise a risk management solution based on a case-study provided by the chief risk officer at the Southeastern Pennsylvania Transportation Authority (SEPTA) eight months before the conference.

At RISKWORLD, the field was narrowed to three university teams that delivered their final presentations before a live audience of risk professionals.

“Each year, the student Risk Management Challenge showcases the bright future of risk management and insurance,” said Megan Miller, executive director of the Spencer Educational Foundation.

On behalf of the competition’s cosponsor, RIMS CEO Gary A. LaBranche said: “The Spencer-RIMS Risk Management Challenge students provided a jolt of excitement and optimism for the profession’s future at RISKWORLD.

“Throughout the competition, the University of Wisconsin-Madison team demonstrated a highly sophisticated command of critical risk manage­ment strategies that was matched by their incredible poise and professionalism. RIMS looks forward to watching all the students who participated in the challenge transition from elite students to risk leaders in the coming years.”

The British Columbia Institute of Technology (Canada) came in second place. The third-place team was Appalachian State University. Each of the three teams also received cash prizes.

“Near Average” U.S. Hurricane Activity Expected This Season

An updated forecast from Colorado State University (CSU) predicts “near average” levels of tropical cyclone activity in the Atlantic basin of the United States between June and November. CSU anticipates that 14 named storms, seven hurricanes and three major hurricanes could form in the region this year.

CSU deems this forecast average based on climate statistics from 1991 to 2020, analyzed by the National Oceanic and Atmospheric Administration. A typical hurricane season now has 14 named storms, seven hurricanes and three major
hurricanes. Previously (1981 to 2010), an average storm season com­prised 12 named storms, six hurri­canes and three major hurricanes.

Although hurricane season officially began on June 1, the first subtropical storm system of this year was already recorded by the National Hurricane Center in mid-January 2023.

According to a press release by the Insurance Information Institute, the CSU forecast indicates a 43% chance of a major hurricane making landfall in the continental U.S. this year. This includes a 21% chance for the U.S. East Coast (including Florida) and a 27% chance for the region spanning from the Florida Panhandle to Brownsville, Texas. &

The R&I Editorial Team can be reached at [email protected].

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