On the surface the P&C industry is running at a ~99% combined ratio — breakeven underwriting, with the investment book doing the heavy lifting on ROE. Median ROE at 11% is the highest print in a decade.
Under the surface, the dispersion is what matters. Carriers with disciplined risk selection and expense control are printing sub-90% combined ratios. Carriers levered to loss-cost inflation, particularly in personal auto and commercial casualty, are still north of 105%.
For allocators, the benchmark that matters is not the industry average — it's the spread. That spread is widening, and it is where the alpha in insurance equities has come from for the last four years.
Founder of Owning Risk. Independent research on the business of insurance and the flow of risk capital.