The COVID pandemic and costly natural catastrophes are expected to tip the US property and casualty (P&C) insurance sector into loss this year.

The Insurance Information Institute and actuarial consultancy Milliman have forecast a combined ratio of 101.7% for 2020, compared with 98.8% last year.

The groups’ quarterly Underwriting Projections report says US P&C insurers’ annual premium growth is projected to be only 1.5%.

“Our estimates of premium growth are tied pretty tightly to economic indicators,” Milliman Principal and Consulting Actuary Jason Kurtz said. “Estimates of 2020 nominal gross domestic product, while still showing shrinkage, have improved.”

The report forecasts US P&C premium growth of 5-6% for 2021-22, and says there are still many uncertainties over the fallout from COVID-19.

“The net loss impact will be the equivalent of a major hurricane,” Insurance Information Institute Chief Actuary James Lynch said. “But as industry veterans know, some major hurricanes hit harder than others.”