2023 was an unremarkable year for insurers. And that’s a good thing. Insurers and their shareholders prefer boring predictable results over unexpected volatile shocks. Property & casualty insurance company stocks performed relatively well. In 2023 the S&P Insurance Stock Index rose 6.4 percent. Although below the 24 percent return for the S&P 500, but without the magnificent seven, the broader stock market returned 8 percent growth. The financial results of the property & casualty insurance industry were healthy. The industry lost money ($19.2 billion) on underwriting, with a combined ratio of 101.7 percent, but an estimated $75 billion of investment income contributed to $55 billion of pretax income (not including a surprise from Berkshire Hathaway described below), a 6.5 percent margin. After $10.9 billion of federal income tax, the margin was 5.2 percent.
