P&C Insurance Industry Posts Strong 2024 Turnaround

U.S. property and casualty insurers rebound with $22.9 billion underwriting gain, marking dramatic turnaround from 2023 losses, AM Best reports.

By: R&I Editorial Team | March 19, 2025

The U.S. property and casualty insurance industry made a remarkable comeback in 2024, posting a $22.9 billion net underwriting gain compared to a $21.3 billion loss in 2023, according to AM Best.

AM Best’s First Look report analyzes data from companies filing 2024 financial statements by March 11, representing 97% of industry net premiums written and 97% of policyholder surplus. The report notes that the P&C sector’s improvement was primarily driven by significant changes in the personal lines segment.

Financial Performance Overview

The industry’s combined ratio, a key measure of underwriting profitability, improved to 96.6 from 101.6 in 2023. Net premiums written grew 8.7% to $908.2 billion, while net premiums earned increased 9.8% to $879.1 billion, demonstrating strong top-line growth.

Despite a modest 2.1% increase in incurred losses and loss adjustment expenses, these costs were outpaced by premium growth. Underwriting expenses rose 9.8%, but were offset by a substantial 21.3% increase in earned net investment income, significantly bolstering P&C insurers’ overall financial results.

Pre-tax operating income surged 123.5% to $109.3 billion. Net income rose an impressive 89.8% to reach $169.3 billion, while the after-tax return on surplus improved dramatically to 15.6% from 8.8% in the previous year.

Catastrophe and Reserve Impact

Catastrophe losses continued to play a significant role in the industry’s performance, accounting for 8.7 points on the combined ratio—unchanged from 2023. Total catastrophe losses for U.S. P&C insurers reached $76.3 billion in 2024, representing a substantial challenge for insurers despite the improved overall results.

The industry benefited from $2.0 billion in favorable reserve development, which reduced the combined ratio by 0.4 points. This positive effect was partially offset by asbestos and environmental losses, which contributed 0.2 points to the combined ratio.

When examining normalized performance metrics, the accident year combined ratio was 96.8. More tellingly, the normalized combined ratio—which excludes both catastrophes and asbestos and environmental impacts—improved to 87.7, highlighting strong underlying operational performance when extraordinary events are removed from the equation.

Capital Position and Market Stability

The industry’s capital position strengthened considerably in 2024, with surplus increasing to $1.1 trillion. This growth was supported by $174.1 billion in combined net income and contributed capital, underscoring the sector’s financial resilience despite ongoing challenges.

Capital management strategies saw notable shifts during the year. The industry experienced a $12.9 billion change in unrealized losses, affecting overall capital positions. Stockholder dividends decreased 20% to $85.9 billion, a significant reduction from the previous year. This change was particularly influenced by National Indemnity Company’s substantial $82 billion distribution in 2023, which created a high baseline for year-over-year comparisons.

Obtain the full report here. &

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

New Jersey Workers’ Compensation Medical Cost Trends in 2024. How to Improve the Trend

Tips for managing costs and outcomes in a state where expenses can track above the national average.

By: Horizon Casualty Services, Inc. | April 1, 2025

In 2024, New Jersey’s workers’ compensation system has been influenced by several key medical trends, including rising medical costs, legislative changes, and evolving treatment protocols. Understanding these developments is crucial for stakeholders navigating the state’s workers’ compensation landscape. Below are just some of the key trends to follow:

Rising Medical Costs

HCS identifies providers with WC and PIP experience and contracts with the services most needed by the injured individual. HCS is contracted with nearly all hospitals and all level 1 and level 2 trauma centers in the State of New Jersey. We identify initial treaters, specialists, physical therapy centers, ambulatory surgical centers, urgent care providers, diagnostic centers and more. Using a proprietary formula, the best providers are highlighted so that clients can rest assured their injured claimants are in the right hands.

Rising medical costs are significantly impacting workers’ compensation systems, with New Jersey (NJ) experiencing notable challenges. Key factors contributing to this trend include:

Absence of a Medical Fee Schedule: Unlike many states, NJ lacks a standardized medical fee schedule for workers’ compensation. Instead, it relies on a “usual and customary” charge system, leading to higher medical expenses. This absence has resulted in NJ having some of the highest workers’ compensation premiums nationwide.
Medical Inflation: Nationally, medical care costs have outpaced general inflation. This trend is driven by increased consumption of medical services, labor shortages, and higher wages for healthcare workers, all of which elevate the costs of services covered by workers’ compensation.
Surgical Costs: NJ reports some of the highest surgical costs in the U.S., averaging 115% more than other states. This is attributed to the lack of fee schedules and the prevalence of out-of-network providers receiving higher payments for services.
Medical Claim Petitions: The practice of medical providers accepting payments and subsequently filing petitions for additional compensation has led to increased payouts and administrative burdens, further driving up costs.

These factors collectively contribute to the rising medical costs in NJ’s workers’ compensation system, posing challenges for employers, insurers, and policymakers in managing and mitigating these expenses.

Legislative Changes

Recent legislative changes in NJ have increased workers’ compensation costs for employers/insurers.

In August of 2024, legislation was enacted to raise the attorney fee cap in workers’ compensation cases from 20% to 25%. This adjustment acknowledges the increased workload of workers’ compensation attorneys since the cap’s establishment in 1927.

NJ’s Division of Workers’ Compensation typically requires employers/insurers to cover 60% of the injured workers’ attorney fees, with the employee responsible for the remaining 40%. With the new 25% cap, employers/insurers costs have risen.

Also, in response to escalating medical costs, NJ has implemented legislative measures aimed at regulating expenses within the workers’ compensation system.

Notably, the state increased the maximum allowable fee for evaluating physicians from $600 to $1,000. This adjustment seeks to ensure that medical experts are fairly compensated for their evaluations, potentially improving the quality of medical assessments in workers’ compensation cases.

Evolving Treatment Protocols

Dave Cucinotta, Director of Finance Strategy and Administration, Horizon Casualty Services, Inc.

The integration of advanced medical treatments and technologies has also influenced workers’ compensation medical trends in the Garden State.

“While these innovations can enhance patient outcomes, they often come with higher costs. The challenge lies in balancing the adoption of these advanced treatments with the need to manage expenses effectively,” said Dave Cucinotta, Director of Finance Strategy and Administration for Horizon Casualty Services, Inc.

The increasing prevalence of workplace-related mental injuries has prompted discussions about compensability and appropriate treatment protocols. Addressing mental health issues requires comprehensive approaches, including counseling and therapy, which can contribute to higher overall medical costs.

Comparative Analysis with Other States

When compared to other states, NJ’s workers’ compensation medical costs are higher than average. Studies by the Workers Compensation Research Institute (WCRI) indicate that medical payments per claim in NJ are notably higher, than in other states.

This comparison highlights the need for continued evaluation of cost-containment strategies to align NJ’s expenses with national benchmarks.

Impact on Stakeholders

The rising medical costs within NJ’s workers’ compensation system have significant implications for various stakeholders:

Employers: Increased medical expenses will lead to higher insurance premiums, affecting business operating costs.
Employees: While access to advanced medical treatment is beneficial, there is a concern that escalating costs could influence the approval and provision of necessary care.
Insurers: Insurance carriers may face challenges in underwriting policies and managing claims effectively considering rising medical costs.

Future Considerations

To address these challenges, stakeholders might consider the following strategies:

Promoting Preventive Care: Encouraging workplace safety and preventive health measures can reduce the incidence of injuries, thereby decreasing overall medical expenses.
Enhancing Loss Control Services: Evaluating workplaces with the intention of preventing injuries before they happen is worth the investment.
Enhancing Case Management: Improving coordination of care and case management can ensure that injured workers receive appropriate and timely treatment, potentially reducing prolonged medical costs.

How to Improve the Trend

With NJ’s workers’ compensation facing significant challenges due to rising medical costs, legislative changes, and evolving treatment protocols, there is a need for improvement.

Addressing these issues requires a collaborative approach among policymakers, employers, insurers, and healthcare providers to ensure that the system remains sustainable and continues to serve the needs of injured workers effectively.

“The most significant way to improve medical cost trends in NJ workers’ compensation is to evaluate who is pricing the claims,” said Cucinotta.

Horizon Casualty Services, Inc. (HCS) has been providing PPO network services to NJ clients since 1994

HCS plays a pivotal role in improving medical cost trends through its extensive provider network and innovative, data-driven strategies to achieve superior medical outcomes at the lowest cost. Through its Outcomes Focused Network Strategy, HCS ensures that injured workers receive care from top-tier providers who prioritize quality, adhere to evidence-based practices, and take a conservative approach to costly interventions like surgery and prescriptions. By contracting with a broad network of premier providers and securing highly competitive rates, HCS significantly reduces costs while maintaining exceptional care standards. Additionally, through proactive dispute management, precise data integrity, and an extensive network, HCS ensures a seamless, efficient process that significantly reduces administrative costs.

Cucinotta adds that, “These innovative approaches positions HCS as a leader in controlling medical costs and driving positive results in the NJ workers’ compensation landscape.”

For More Information

For more information, email Jed Hoban, HCS Business Development Executive, at [email protected] or visit https://www.horizonblue.com/horizoncasualty/.

About Horizon Casualty Services, Inc.

HCS, in business since 1994, is a leading PPO in New Jersey WC and PIP. HCS has a 100% direct-contracted provider network that includes almost all New Jersey acute care hospitals. The network delivers significant overall savings and, with its deep focus on precision, an extremely low appeals rate. Its PPO results, combined with its Healthcare Value Strategy and Outcomes Focused Network, enable insurers to be the best at delivering quality medical care to claimants at the right cost — clearly a win-win for all. HCS is an independent licensee of the Blue Cross and Blue Shield Association.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Horizon Casualty Services, Inc. The editorial staff of Risk & Insurance had no role in its preparation.

Horizon Casualty Services Inc., an affiliate of Horizon Blue Cross Blue Shield of New Jersey, in business since 1994, is a leading PPO in New Jersey workers' compensation and personal injury protection. The company's 100% direct-contracted provider network includes almost all New Jersey acute care hospitals, significant overall WC savings and, with its deep focus on precision, an extremely low WC appeals rate of 0.2%. Its PPO results, combined with its WC healthcare value and OFN strategy, enables insurers to be the best at delivering quality medical care to claimants at the right cost — clearly a win-win for all.