Financial Results
Insurers show strongest financial performance in a decade
Insurers showed strong financial performance in 2024 compared to the prior year, according to an analysis by Compensation Advisory Partners.
Publicly traded insurance companies showed strong financial performance in 2024 compared to the prior year, according to an analysis by Compensation Advisory Partners.
CAP released its annual research on executive compensation and financial performance across two industry segments, including 19 of the largest publicly traded property/casualty and life/health insurers.
Among the key takeaways from the analysis:
- In 2024, insurance companies had their best year with respect to total shareholder return since 2013. This momentum has continued in 2025, where year to date, insurance companies are outperforming the S&P 500.
- The median increase to CEO total target compensation for 2024 was 6.1%, largely driven by increases to target long-term incentives. Median increase for P/C CEOs was slightly higher than L/H CEOs (6.8% vs. 4.7%).
- Top-line growth in 2024 was in the double digits and at its highest rate in more than a decade, while profitability and returns continued to grow year over year. P/C insurers had overall stronger performance results than did L/H companies.
Strong overall performance in 2024
Top line growth in the insurance industry was particularly strong in 2024, with median revenue growth of +10.1% for all insurers in CAP’s. This was the largest increase over the last 10 years
Triple-I: US Personal Auto Insurance Industry Generates Profitable Underwriting Result but Faces Headwinds Due to Legal System Abuse, Regulatory Environment
The personal auto insurance industry achieved an underwriting profit in 2024 but faces headwinds from legal system abuse and regulatory environment. The United States personal auto insurance industry achieved its strongest underwriting performance in the post-pandemic era, recording a net combined ratio of 95.3 in 2024, but continues to face headwinds due to escalating legal system abuse and a challenging regulatory environment, according to a new Issues Brief published today by the Insurance Information Institute (Triple-I).
"While the improved 2024 underwriting performance is encouraging, we remain focused on several challenges facing the personal auto insurance industry," said Triple-I CEO Sean Kevelighan. "The growing impacts of legal system abuse, driven by the exploitive tactics of billboard attorneys, combined with an increasingly complex regulatory environment, will continue to put pressure on the market. It’s essential for auto insurers to continue managing these evolving risks effectively to sustain profitable growth."
Commercial Insurance Prices Rise 5.3% in Q1 as Market Pressures Continue
*First-quarter data shows sustained upward pricing momentum across most coverage lines, with notable variations by business segment, WTW reports.
U.S. commercial insurance pricing rose 5.3% in the first quarter of 2025 compared to the same period last year, reflecting persistent market pressures that continue to drive costs higher for businesses seeking coverage, according to WTW’s Commercial Lines Insurance Pricing Survey.
The latest quarterly results demonstrate the resilience of pricing momentum that has characterized the commercial insurance market for several years. While the current 5.3% aggregate increase represents a slight moderation from recent quarters, it maintains the pattern of consistent upward pressure that has defined this market cycle, according to the report.
Historical context shows the market has experienced significant volatility over the past several years. Premium increases surged to nearly 10% during the tumultuous second through fourth quarters of 2020, as insurers grappled with pandemic-related uncertainties and mounting claim costs. The market then entered a period of gradual stabilization, with increases declining to just below 5% by the fourth quarter of 2022., the report noted.
News
Erie Insurance confirms cyberattack behind business disruptions
[Ed. Note: Erie Insurance not alone. Another Pa.-based insurer faces network outage of its own Erie Insurance and Philadelphia Insurance Companies are experiencing network outages. Erie Insurance has restored some services and provided contact information for claims and policy questions. There is no known connection between the two outages].
Erie Insurance and Erie Indemnity Company have disclosed that a weekend cyberattack is behind the recent business disruptions and platform outages on its website.
Erie Indemnity Company is the management company for the Erie Insurance Group, a property and casualty insurer with over 6 million active policies. The company provides auto, home, life, and business insurance policies through independent agents.
Since Saturday, June 7, Erie Insurance has been suffering from widespread outages and business disruptions, with customers unable to log into the customer portal and reporting difficulties making claims or receiving paperwork from the company.
Today, Erie Indemnity Group filed a Form 8-K filing with the U.S. Securities and Exchange Commission, stating it detected "unusual network activity" on June 7, 2025.
In a similar notice on the Erie Insurance website, the company says it activated its incident response protocol in response to the attack.
"On Saturday, June 7, Erie Insurance's Information Security team identified unusual network activity. We took immediate action to respond to the situation to safeguard our systems and data," reads a notice on Erie Insurance's site.
California investigates State Farm over wildfire claims | AP News
California’s top insurance regulator on Thursday launched an investigation into State Farm over the company’s handling of claims from the January Los Angeles-area wildfires.
The investigation comes after survivors of the Palisades and Eaton fires said that the state’s largest home insurer was delaying and mishandling claims regarding damage to their homes and possible contamination from smoke.
The blazes destroyed thousands of buildings around Los Angeles, killed 30 people and displaced thousands of others. They were estimated to be among the costliest natural disasters in U.S. history.
California Insurance Commissioner Ricardo Lara said the investigation will review whether the company complied with state consumer protection and claim-handling laws.
“Californians deserve fair and comprehensive treatment from their insurance companies,” the Democrat said in a statement. “No one should be left in uncertainty, forced to fight for what they are owed, or face endless delays that often lead consumers to give up.”
State Farm, which has about 1 million home insurance customers in California, said it will cooperate with the state’s review. The insurer has received roughly 13,000 claims related to the fires and has paid out about $4 billion to customers, the company said.
“We’re here to help our customers recover and we empathize with those who are rebuilding their lives,” State Farm said in a statement. “Our focus continues to be on supporting our customers in their recovery from the largest fire event we have ever experienced.”
Commentary/Opinion
State Farm Investigation Must Conclude Before Rate Hike Approved Says Consumer Watchdog
Consumer Watchdog issued the following statement on Insurance Commissioner Ricardo Lara's announcement today of a market conduct examination into State Farm claims handling abuses after the Eaton and Palisades fires.
"State Farm customers have come forward with evidence of their claims being low-balled, slow-walked and outright denied. Today's announcement of an investigation came only because these Eaton and Palisades fire survivors raised their voices to demand the insurance benefits they paid into for decades. However market conduct exams can take years. Fire survivors facing financial devastation need an investigation into whether State Farm is breaking the law expedited and made public before another massive rate hike is approved. After the 1991 Oakland Hills fires, former Insurance Commissioner John Garamendi ordered insurance companies to pay survivors for their full loss within months of launching an investigation into claims complaints. Commissioner Lara must act with the same urgency and complete the investigation before another rate hike is approved," said Carmen Balber, executive director of Consumer Watchdog.
California insurance is a mess indeed
Having spent most of my 40 year career marketing insurance in California, I read with interest The Acorn’s editorial in the June 6 issue. It is long overdue.
The state of insurance (and its affordability) is indeed a mess, and there’s plenty of blame to go around. But as is so often the case, the root of the problem lies with us—the California voting public, and the problem is largely two-fold.
First, the office of the CA Insurance Commissioner is an elected position. It was us—the electorate (or at least those of us who bother to vote)—that put Ricardo Lara, arguably one of the most unqualified and incompetent public servants ever, in that position. Since being elected in 2018, Commissioner Lara has succeeded at one thing—that is to chase the majority of standard (admitted) carriers out of the state.
Lara, in lockstep with his boss, Gov. Gavin Newsom, doesn’t seem to realize that in order to continue to operate, and unlike entities in the public sector, insurance companies and their stakeholders need to make a profit.
By attempting each year to cap rate increases and thereby “protect” California consumers, Lara has accomplished the opposite.
One by one, the major carriers have basically flipped Lara and California the bird, opting to greatly reduce or simply shut down their operations here.
The second major factor in play here is that we appear to have changed our view on property and casualty insurance over the past twenty or so years. Evidence of this is the explosion of advertising for ambulance-chasing injury attorneys across our media.
There seem to be those among us who view a minor fender-bender as a potential lottery win, or a distant brush fire as an excuse to fall prey to the door-knocking hucksters who convince their “victims” that they “deserve” fresh paint, new patio furniture, or an updated kitchen.
Until we, as a community, realize what P&C insurance is truly intended for —repairing or replacing that which was truly damaged or destroyed, and nothing more—we will continue to swim in the cesspool we have managed to create.
Andy Geesen Agoura Hills
Claims
Fixing the Claims Experience Where It Matters Most: In the Mess
Before becoming a parent, I thought I could plan for everything. There are books, blogs and apps galore. My prediction was that I could stay ahead of the chaos if I studied, prepared enough and followed the proper steps.
Then my son was born.
Chris Casaleggio is regional director, claims, disputes and forensics at the Vertex Companies.
Research
Modernizing Insurance Communications for the Digital-First Customer
Picture this: A customer seamlessly signs up for your insurance policy through your sleek mobile app in under ten minutes. They’re impressed. Fast forward a few months and they receive a dense, ten-page policy update letter in the mail, written in impenetrable legal jargon, with no explanation of what actually changed or why it matters to them. That same customer who once praised your digital experience now questions whether they are with the right insurer.
Experiences like this are still too common across the insurance industry. Many insurance organizations, particularly large traditional insurers, have invested heavily in modernizing their acquisition and onboarding experience, while the servicing side of the customer journey has been largely neglected.
The reality is most customers rarely interact with their carrier or agent after the initial purchase. In P&C, only 5.5 percent of policyholders file claims annually. Life insurance claims typically occur decades after purchase, if at all. Written communications—policy updates, billing notices, annual statements—are often the only touchpoints customers receive for years at a time. Yet these critical communications are often treated as compliance afterthoughts rather than strategic customer experience opportunities.
The majority are still mailed despite only 26 percent of policyholders preferring print.
Patrick Kehoe drives product strategy in collaboration with the product development team at Messagepoint, a provider of customer communications management software
AI in Insurance
U.S. Insurers to More Than Double AI Investment in the Next 3-5 Years: Wipro Report
Wipro Limited today announced the release of its "The AI Advantage: Building Tomorrow’s Insurance Enterprise" report.The report, which includes responses from 100 business leaders from U.S. insurance companies with revenues surpassing $500 million, reveals an industry actively embracing Artificial Intelligence’s (AI’s) potential.
As insurance firms look to leverage AI to transform their core processes, the report shows that AI is set to become a much bigger part of Information Technology (IT) budgets, with 81 percent of firms planning to increase AI spending within the next year and most firms looking to more than double AI budgets - from 8 percent today to 20 percent - in the next 3-5 years.
Almost all (92 percent) of respondents agree that AI is essential for maintaining their competitive edge in customer experience and personalization. However, the findings point to a two-speed market, where larger firms lead AI adoption - with their robust governance frameworks and vast data resources - while many mid-sized and smaller firms face hurdles from legacy systems to limited AI expertise.
Underwriting is one of the main areas where insurers are aiming to derive value from AI. With its ability to process large volumes of structured and unstructured data, AI is increasingly helping insurers realize enhanced efficiencies and precision in underwriting. While all insurers are working to integrate AI into the underwriting process, only less than half (46 percent) say they have extensively implemented AI systems into their underwriting workflows.
InsurTech/M&A/Finance💰/Collaboration
M&A deals plunge in Q1
Aggregate deal value also dropped by 87%, year over year.
Economic uncertainty, driven largely by President Trump’s tariffs, is likely behind the drop. Insurance broker M&A deals hit a four-year low in the first quarter of 2025, according to a new report from S&P Global.
The first quarter saw just 101 deals, less than any quarter since 2021. That’s also down from the 125 deals logged in the first quarter of 2024, the previous low.
Trump executive order presents challenges for workers’ comp, auto insurers
Deal values were down significantly too. The first-quarter aggregate transaction total was $1.73 billion, compared to $13.49 billion in Q4 of 2024 and $13.23 billion in the first quarter of 2024.
Economic uncertainty, driven largely by President Trump’s tariffs, is likely behind the drop, S&P Global reports. M&A deals were down across the board in the United States and Canada in the first quarter. However, aggregate deal value still rose in the broader US and Canadian markets.
The largest deal announced in Q1 was the purchase of Woodruff-Sawyer & Co. by Arthur J. Gallagher & Co. for $1.2 billion. The deal was completed in April.
The first quarter’s other large deal was Ryan Specialty Holdings’ acquisition of Velocity Risk Underwriters from funds managed by Oaktree Capital Management. They paid an up-front cash consideration of $525 million, subject to purchase price adjustments. The deal closed in February.
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