Preliminary US property and casualty (P&C) results for 2025 showed the industry delivering one of its strongest underwriting performances in years, largely on the back of unusually benign catastrophe activity, according to new data from Verisk and the American Property Casualty Insurance Association (APCIA).
Private US P&C insurers reported an estimated net underwriting gain of about $63 billion for full-year 2025, compared with a $23 billion gain in 2024 and a $22 billion underwriting loss in 2023. The full-year combined ratio improved to 92.9%, down from 96.6% in 2024, while policyholders’ surplus rose to $1.2 trillion from $1.1 trillion a year earlier. Net written premiums grew 4.8% to $971 billion, and net earned premiums increased 6.3% to $953 billion.
Despite the stronger underwriting performance, net income after tax fell to $148 billion from $169 billion in 2024, reflecting weaker investment results. Realized capital gains declined to $23 billion from $79 billion the prior year. Verisk noted that, once outsized gains by a single insurer in recent years are excluded, overall investment gains were broadly in line with historical averages, though higher than in 2022 and 2023.
Saurabh Khemka (pictured, left), president of Verisk Underwriting Solutions, said the 2025 result reflected a rare combination of firm underwriting and favorable catastrophe experience rather than a fundamental change in the industry’s risk profile.
“The industry delivered one of its strongest underwriting results in years in 2025, supported by a near-record low combined ratio, but that outcome was driven more by unusually low catastrophe losses rather than a fundamental shift in industry risk,” he said.
Khemka pointed to an almost 90% decline in hurricane-related claims, which materially reduced catastrophe losses and was driven by limited US landfall rather than changes in underlying exposure.
He added that some lines, including personal auto, showed core improvement after significant rate action and tighter underwriting discipline, while workers’ compensation continued to generate consistently favorable results. At the same time, overall premium growth slowed and commercial liability remained a drag on performance.
“Taken together, these dynamics make 2025 a reset after several years of volatility, not a new normal,” Khemka said. He warned that ongoing catastrophe variability, moderating rate momentum, and elevated legal system costs mean underwriting discipline will be essential heading into 2026 and beyond. Recent tornado and hail events in 2026 have already underscored the continuing volatility of catastrophe risk, he added.
Verisk and APCIA also reported that net written premiums rose 4.8% to $971 billion in 2025, up from $927 billion in 2024. Net earned premiums increased 6.3% to $953 billion, compared with $896 billion the year before. The industry recorded an estimated net underwriting gain of $63 billion, up from a $23 billion gain in 2024.
Incurred losses and loss adjustment expenses declined 0.4%, a reversal from the 2.3% increase reported in 2024. The combined ratio improved to 92.9%, from 96.6% in 2024. Policyholders’ surplus rose to $1.2 trillion, up from $1.1 trillion. Realized capital gains fell to $23 billion from $79 billion, while net income after tax slipped to $148 billion from $169 billion.
The results are based on annual statutory statements filed with US regulators by private P&C insurers, including reinsurers, excess and surplus lines insurers, and US-domiciled insurers owned by foreign parents. They exclude state workers’ compensation funds and other residual market entities, the National Flood Insurance Program, and foreign insurers. The estimates cover about 97.8% of all business written by US P&C insurers.
Robert Gordon (pictured, right), senior vice president, policy, research and international at APCIA, said industry results “continued to stabilize” in 2025, with incurred losses largely flat due to the “unusual lack of hurricanes making landfall in the United States.”
He noted that policyholders saw some relief as net written premium growth slowed from 8.8% in 2024 to 4.8% in 2025. According to APCIA, personal and commercial insurance spending declined in 2025 relative to total consumer spending and gross industrial output, respectively.
Gordon said insurers’ net income fell 12.6%, partly because of reduced realized capital gains, and stressed that performance varied significantly by state and line of business.
He highlighted Florida as an example where homeowners' and auto insurance losses and rates declined significantly in 2025 following legal system abuse reforms, while loss ratios for contractors’ liability remained elevated nationwide. Legal system abuse continues to challenge commercial liability lines, he added, with significant adverse reserve additions for recent accident years still emerging in commercial auto liability and other liability.
“While industry premium growth significantly slowed in 2025, particularly in personal lines, losses will continue to face long-term pressures from continuing inflation, demographic shifts, natural disaster severity and legal system abuse,” Gordon said.
The numbers reinforce several familiar themes for carriers and reinsurers. Annual results are increasingly sensitive to volatility in so-called "secondary perils" and non-modeled weather risk.
Severe convective storms, hail, and localized flooding are driving cost pressure and coverage disputes, particularly where road closures and access issues affect vehicles and property without necessarily triggering headline catastrophe events. That dynamic is relevant to US commercial auto, inland marine, and SME property portfolios as carriers reassess aggregation, retentions, and pricing for high-frequency “attritional cat” losses.
The data also sit against a broader push to embed analytics and automation more deeply in underwriting and claims. Globally, insurers are using AI and external intelligence to build a more objective view of risk instead of relying solely on long questionnaires and self-reported controls.
While much of the early focus has been on cyber and specialty lines, similar tools are being rolled out across P&C books to sharpen pricing, fraud detection, and regulatory reporting. A year of strong underwriting profit gives US carriers additional room to fund these investments before rate momentum fades.
From a capital perspective, the combination of a sub‑93 combined ratio and rising surplus strengthens balance sheets heading into what could be a more volatile period. However, with realized capital gains already falling sharply and the interest rate path uncertain, insurers have less scope to rely on investment income and one‑off gains to offset any future deterioration in underwriting margins.
Against that backdrop, Verisk characterized 2025 as a reset year after several seasons of volatility rather than a turning point. With rate increases moderating, legal system costs remaining elevated, and catastrophe risk staying highly variable, both Verisk and APCIA emphasized that underwriting discipline, careful risk selection, and active portfolio management will be critical as the industry moves through 2026 and beyond.
