NAMIC has partnered with Guy Carpenter to model the impact of potential risk scenarios on the US mutual insurance industry. In 2023, property insurers faced a record number of catastrophic weather events. However, higher primary rate levels along with expected cooling of inflation should lead to non-catastrophe loss costs that are more manageable. In this latest round of testing, the adverse scenarios modeled were severe weather, financial crisis, and stagflation.

For the third consecutive year, the National Association of Mutual Insurance Companies (NAMIC) has partnered with Guy Carpenter to model the impact of potential risk scenarios on the US property and casualty (P&C) mutual insurance industry. This exercise brings to light some of the key risks facing NAMIC members today, as management teams attempt to navigate through a period of heightened uncertainty in underwriting and investment markets.

In 2023, challenges continued for property insurers faced with a record number of catastrophic weather losses. Amplifying this challenge, many carriers were caught between a highly regulated primary market, with many states limiting changes to rates and coverage, and a hardening property reinsurance market in which diminishing appetite for catastrophe (cat) exposure put more of the risk back onto carriers’ own balance sheets.

Complicating the challenges for many mutuals, auto losses continued to rise, as more people returned to their pre-COVID routines, driving another year of unfavorable auto performance for carriers. Looking to 2024, mutuals will continue to…