This Performance Update report examines full year 2023 financial performance. Our full Insurance Industry report, which is typically published in the second quarter, will cover 2023 executive compensation trends. Our sample of insurers represents 19 of the largest Property & Casualty (P&C) and Life & Health (L/H) Insurance companies with median revenue of approximately $19B.

Key Observations – 2023 Full Year Results

• Among all companies reviewed, Revenue growth was stronger in 2023 than 2022, and in line with 2021. This was driven by P&C companies in particular, with Revenues increasing +11.5% year-over-year at median in 2023, compared to +4.2% growth in 2022. Premium growth for P&C insurers also remained strong in 2023. Revenues for L/H insurers declined -1.1% in 2023, following a flat year in 2022.
• Net Investment Income rebounded strongly in 2023 for the full sample, up +12.1% at median after a -6.6% decline in 2022.
• Operating profitability improved year-over-year, with Operating Income and Operating ROE increasing +9.9% and +1.5 percentage points, respectively, for the full sample. This is a positive improvement from the 2022 decline in Operating Income performance, following exceptional 2021 results. Operating Income for P&C insurers increased +21.9% in 2023, compared to +5.1% growth posted by L/H insurers in the study. Operating ROE for L/H insurers was flat year-over-year.
• For 2023, median Operating Income ROE for P&C companies was 11.0% and for L/H insurers, 12.8%
• In 2023, catastrophe loss (CATs) performance for P&C insurers was mixed by company. At median, CATs increased slightly (+2.6%), however three companies had an increase in CAT losses of more than +50% vs. prior year. Cumulative reported CAT losses among the 10 P&C companies increased from $12.3B in 2022 to $15.7B in 2023. On average, P&C insurers in our sample recorded CATs for the first half of 2023 that were about 63% of the full year total (36% in 2022), with 7 companies reporting higher CATs in the first half than the second half (1 in 2022).
• A recovery in operating performance in the second half of the year lifted share prices for insurers, with a +6.4% gain in 2023 for the full group of companies. However, share price performance lagged 2022, which had a +18.4% increase, and 2021, which had a +27.4% increase. This also compares with the median 2023 return for the S&P 500 of +12.7%.

Key Observations – Second Half Performance Highlights

• Top line Revenue and Premium growth for P&C insurers for the full year 2023 continued to grow at similar rates as the first half of 2023. L/H insurers experienced a dip in Revenue Growth as the year progressed, posting a -1.1% Revenue decline year-over-year for the full year after increasing +2.1% in the first half of the year.
• Net Investment Income growth for all insurers continued its momentum as the year progressed, with full year 2023 results exceeding the already strong growth reported in the first half of the year.
• Operating Income for the full sample sharply reversed course from where it was tracking for the first half of the year, posting a nearly +10% increase for the full year after a slight decline in the first half of the year.
• After historic increases in CATs for P&C insurers in the first half of 2023, CAT losses slowed in the second half of the year. For the first half of 2023, the 10 P&C companies reported cumulative CAT losses of $9.9B, which was more than double the reported CAT losses for the first half of 2022 of $4.4B. For the second half of 2023, the CAT losses declined compared to the same period last year, from $7.9B to $5.9B.
• Total shareholder return improved from where it was tracking mid-year, reversing from a -5.7% decline year-over year (January 1 through August 31), with a year-end gain of +6.4%.

---

For questions or more information, please contact the CAP Insurance Team:

Melissa Burek
Partner
[email protected]
212-921-9354

Roman Beleuta
Principal
[email protected]
646-532-5932

Kyle White
Associate
[email protected]
646-568-1161

Matthew Schwarcz
Analyst
[email protected]
646-568-1174

---

CAP’s Insurance Sample

P&C Companies

• Allstate Corporation
• American International Group, Inc.
• Chubb Limited
• Cincinnati Financial
• CNA Financial Corporation
• Hanover
• Hartford Financial Services Group
• Progressive Corporation
• Travelers Companies, Inc.
• W.R. Berkley.

Life & Health Companies

• Aflac Incorporated
• Genworth Financial, Inc.
• Globe Life
• Lincoln National Corporation
• Manulife Financial Corporation
• MetLife, Inc.
• Principal Financial Group Inc.
• Prudential Financial, Inc.
• Unum Group