Lower winter storm losses and a recovery in personal auto results drove the US property casualty market to a strong statutory underwriting profit, year-over-year for the first quarter of 2024.

Fitch Ratings says it has positioned the market for a return to underwriting profitability and significant return on capital improvements for the full year, although results may not match first quarter levels due to uncertainty regarding natural catastrophe exposures and loss reserve experience.

Fitch said the market faces considerable challenges regarding sustainability of commercial lines pricing to meet ongoing loss-cost inflation and heightened litigation related risk in several segments.

Favourable pricing conditions in the first quarter of 2024 supported ongoing strong net written and earned premium growth of 10 per cent and 11 per cent, respectively.

The Fitch market statement said: “The industry underwriting combined ratio improved by over eight points year-over-year to 94 per cent in 1Q24, representing the best first quarter underwriting result since 2007.

“Favourable prior period reserve development was higher in 1Q24, representing 3.3 per cent of earned premiums versus 1.9 per cent in the prior year quarter.”