2024 Mutual Factor

Now in its seventh iteration, NAMIC’s 2024 Mutual Factor report follows the release of the second midyear report issued in late June, which previewed the high-level U.S. insurance company financials emanating from 2023 and the start of 2024. NAMIC and Aon appreciate the continued interest in this report, with the 2024 report providing a unique perspective on the impact that the past 24-30 months have had on our industry.

As the industry continues to navigate the challenging circumstances brought on by the clashing impact of inflation, weather, and legal system abuse, mutual insurers have remained steadfast in their commitment to their policyholders and the long-term stability they are known for.  However, the perpetuation of the new era of risk has required swift underwriting action, active engagement with regulators, clear communication to agency partners, and short-, medium- and long-term strategic decision-making aimed at returning the industry to the position of steady profitability needed to allow mutual insurers to continue to meet the growing needs of their customers and agency partners.

Among the key findings on financial performance:

• In 2023, mutual insurers recorded loss and loss adjustment expenses of 84.0 percent of premium compared to the five-year average of 77.3 percent. Stock companies outperformed their mutual counterparts at 71.1 percent for 2023, which compares more closely to their five-year average of 70.8 percent.
• In 2023, the industry grew capital and surplus by 6.1 percent, a considerable shift from the 6.5 percent decrease in capital in 2022.
• The combined ratio for mutual insurers for Q2 2024 was 103.6, compared to 113.7 during the same period in 2023. Stock insurers saw combined ratios of 94.3 in Q2 2024 versus 100 in Q2 of 2023, reflecting their focus on returns.

The Mutual Factor 2024 concludes with a consumer opinion survey about the property/casualty industry conducted by research firms Readex Research and Dynata, following a similar benchmark study by a separate firm in 2018. Key findings include:

• Of respondents familiar with mutual insurance companies, eighty-eight percent said they were at least somewhat likely to choose a mutual insurance company for their next auto or home insurance purchase.
• Twenty-eight percent made a change in insurance company recently. Of those who made changes, 65 percent reported it being due to price of premium.

As the industry continues to steadily navigate the challenging environment, NAMIC and Aon continue to share an enthusiasm for the publishing and evolution of this report.