Improved results for AM Best-rated US P/C mutual insurers

Fewer catastrophe losses in 2018, along with better underwriting performance by smaller mutuals, have led to better overall results for AM Best-rated US property/casualty (P/C) mutual insurers.

Kimberly Muccia, senior financial analyst, AM Best, said: “There were less catastrophe losses in 2018, as more normal weather patterns in territories that mutuals operate in helped to improve the bottom line.”

Addressing the drivers behind the sector's net income last year, which tripled to more than $20 billion, Muccia said: “The improved operating performance was largely driven by the sector’s improved underwriting performance. There were less catastrophe losses in 2018, as more normal weather patterns in territories that mutuals operate in helped to improve the bottom line.”

Muccia also highlighted how mutuals can further their innovation.

“Innovation is definitely becoming increasingly more critical to all organizations, and the mutual segment is no exception,” she said. “However, some of the smaller ones might not have innovation in their expense budget to invest in third-party resources. Nonetheless, one of the ways they could focus on innovation is through the use of cross-functional training. They could utilize the ideas of their employees and look at the obstacles that they are facing. By organizing, as well as prioritizing these ideas, it could help their companies adapt to the changing market dynamics.”