2021: 2020 Property-Casualty Loss Reserves - Reserves Strengthen During Lockdown

Price : $1,750.00

Conning analyzes Schedule P statutory data and presents its loss reserve findings for individual lines of business, both for the industry and for small, midsized, and large groups of companies. Our prior-year analysis indicated that the industry’s loss reserve position was redundant. Conning assesses the industry’s reserve position at year-end 2020, compares it to prior years, and examines the implications of its relative strength—or weakness. The study includes historical loss development data, accident-year results, and analysis of trends based on key segments and company actions.

1. Introduction
2. Executive Summary
3. Industry Overview—Common Themes

  • More Favorable Loss Development in 2020

  • Factors Influencing the 2020 Reserve Picture

  • Summary Evaluation of Reserve Strength

  • Loss Reserves by Company Size Segment

  • Summary

4. Private Passenger Auto Liability/Medical

  • Reserve Position Strengthens Further in 2020

  • Reserves for Most Accident Years Appear Redundant

  • Summary

5. Homeowners/Farmowners

  • Further Improvement in Reserve Redundancy in 2020

  • Summary

6. Workers’ Compensation

  • No Change in Reserve Redundancy in 2020

  • Summary

7. Commercial Multiperil

  • Reserve Redundancy Improves in 2020

  • Summary

8. Other Liability

  • Reserve Position Continues to Improve

  • Summary

9. Commercial Auto/Truck Liability/Medical

  • Continued Improvement in Reserve Position, but Still Deficient

  • Summary

10. Medical Professional Liability

  • Reserve Redundancies Have Largely Run Out

  • Summary

11. Miscellaneous Lines

  • Reserve Redundancy Improves; Favorable Reserve Development Continues

  • Summary

12. Asbestos and Environmental

  • Development of the Survival Ratio

  • Summary

13. Industry Comparison with Small Insurers

  • Reserves for Small Insurers Appear Deficient; Varies by Line

  • Reserve Adequacy Levels Vary by Line of Business

  • 2020 Calendar-Year/Accident-Year Reconciliation

  • Summary

14. Industry Comparison with Midsized Insurers

  • Reserve Position for Midsized Insurers Improves

  • Improvements in Major Lines of Business

  • 2020 Calendar-Year/Accident-Year Reconciliation

  • Summary

15. Industry Comparison with Large Insurers

  • Large Insurers’ Reserves Healthier Than the Industry’s

  • Redundancies in Most Lines of Business

  • 2020 Calendar-Year/Accident-Year Reconciliation

  • Summary


A. Methodology
B. Glossary
C. Additional Data


Our review of the property-casualty insurance industry’s loss reserve position suggests improvement in 2020, when compared to our previous annual analysis. Overall, Conning believes the industry continues to carry sufficient reserves (gross of discount), with a modest degree of safety, under assumptions that claim settlement patterns will continue at their current pace. This is an important assumption that continues to be of concern in this period of low inflation and high volatility. With inflation and/or more robust growth, these patterns are likely to change, thus adversely affecting loss reserve adequacy.

In 2020, the industry experienced favorable loss development of $7.0 billion, representing 1.1 points of benefit on the calendar-year loss ratio. Based on the preliminary data used for this analysis, this marks the 15th consecutive year that the industry has had favorable development from prior accident years.