US property & casualty outlook: economic headwinds follow a strong first quarter

US P&C profitability is experiencing headwinds as the US economy rebounds back to normal activity. Rapid rises in prices for construction materials and cars during the economic reopening are reflected in growing property and motor claims severity, particularly affecting personal lines. Commercial lines continue to benefit from rate rises, but we see some deceleration from recent highs.

Key takeaways:

  • We maintain our 2021 ROE forecast at 6.1%, as strong 1Q21 ROE of 9.2% was boosted by one-off factors.
    • Sector-specific price rises are raising property and motor claims severity in the near term. 
    • Rate increases continue to support improvements in  commercial lines profitability.
    • We maintain our premium growth forecast for 2021 at 6.3%.

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Economic Outlook US property & casualty outlook: economic headwinds follow a strong first quarter

SEE ALSO FORMER ECONOMIC OUTLOOKS