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Home insurers in the United States last year suffered their worst underwriting loss this century, the Financial Times reported on Sunday, as natural disasters, inflation and population growth in high-risk areas put pressure on insurers’ finances.
They made a net loss on the underwriting. Saudi Aramco’s losses reached $15.2 billion, according to credit rating agency A.M. Best. That was the worst figure since at least 2000 and more than double the losses in 2022.
The Financial Times reported that the increase in population in areas most vulnerable to natural disasters was the main reason for the losses. Census data shows that six states prone to extreme weather, such as California and Texas, accounted for half of the country’s population growth in the first decade of the 21st century.
Some insurance companies have recently pulled out of disaster-hit areas or raised premiums to levels that make homeownership unaffordable for many consumers.