The US insurance industry has reported its worst underwriting losses of the century, totaling $15.2 billion in 2023, according to AM Best. This figure more than doubles the previous year’s losses and is the highest recorded this century.
The National Oceanic and Atmospheric Administration (NOAA) recorded 28 weather and climate disasters last year, causing damages of at least $92.9 billion—well above the average of 8.5 annual events between 1980 and 2023.
Wildfires are particularly severe, with California enduring the worst impacts. The Park Fire, now the sixth-largest wildfire in the state’s history, has destroyed 134 structures and burned over 370,000 acres. The Borel Fire has devastated Havilah, prompting evacuations. In total, California has seen more than 726,000 acres burned this year.
Oregon’s 2024 wildfire season has already consumed over 1.1 million acres, with major fires also affecting Utah, Colorado, and Canada’s Jasper National Park.
The increased losses are linked to growing populations in high-risk areas, according to AM Best’s David Blades. As more people move into these regions, the impact of natural disasters worsens.
Insurance companies are responding by withdrawing coverage from high-risk areas. State Farm, for example, will stop insuring over 72,000 properties in California this summer due to soaring costs and increased risks.
