US home insurers suffer biggest loss of century in 2023, FT says

(Reuters) – U.S. home insurers suffered their worst underwriting loss this century in 2023, as a toxic mix of natural disasters, inflation and population growth in at-risk areas put a vital financial market under acute pressure, the Financial Times reported on Sunday.

Insurers providing policies to homeowners were hit with a $15.2 billion net underwriting loss last year, according to figures from rating agency AM Best, the report added, saying that the figure was the worst since at least 2000 and more than double the previous year’s losses.

The FT said that the report identified rising populations in those regions most susceptible to natural disasters as a significant factor — citing census figures showing that six states prone to severe weather, including California and Texas, accounted for half of the country’s population growth in the 2010s.

The figures lay bare the underwriting conditions that have sparked a pullback by US insurers from disaster-hit areas, either exiting markets or driving up prices, creating an affordability crisis for many homeowners, the FT said.