The US real estate / accident industry's net subscription revenue decreased by 86% in the first nine months of 2020, compared to the previous year, to $ 600 million, as insurers reported COVID-19 related increases in insurance costs and dividends to according to an AM Best Report released Monday .
Report by Oldwick, New Jersey-based A.M. Best is based on nine months '2020 statutory statements received on November 18 and accounts for 97% of the total industry's net premiums and 96% of policyholders' surpluses.
The report states that the reduction in insured exposures due to home orders and government-ordered business closures in response to the pandemic led some certain / accident insurers to provide premium credit, while repayments and policyholders' dividends increased as required by existing insurance terms. Voluntary premium repayments can be reported as a guarantee cost if certain conditions are met, according to the report.
The total industry ratio for nine months 2020 was 98.7%, compared to 98% for the comparable period last year.
AM Best estimates of disaster losses were 8.3 points of the combined ratio compared to estimated 4.4 points for the comparable period 201