P&C Insurers Post Strong 2025 Underwriting Gain, but Catastrophe Risks Loom
Event summary
- U.S. P&C insurers reported a $63B net underwriting gain in 2025, up from $23B in 2024, driven by a 90% drop in hurricane-related claims.
- Net written premiums grew 4.8% to $971B, while the combined ratio improved to 92.9% from 96.6% in 2024.
- Net income after taxes declined 12.6% to $148B due to reduced realized capital gains.
- Personal auto and workers’ compensation lines showed core improvements, while commercial liability and overall premium growth decelerated.
- Policyholders’ surplus increased to $1.2T from $1.1T in 2024.
The big picture
The 2025 underwriting gain was largely driven by unusually low catastrophe losses rather than a fundamental shift in industry risk. While personal auto and workers’ compensation lines showed improvements, commercial liability and overall premium growth decelerated. The industry faces persistent pressures from inflation, demographic shifts, natural disaster severity, and legal system abuse, suggesting that recent profitability may not represent a new normal.
What we're watching
- Catastrophe Variability
- How the return of severe weather events in 2026 will impact underwriting results and profitability.
- Rate Momentum
- Whether insurers can sustain rate increases amid moderating premium growth.
- Legal System Costs
- The pace at which elevated legal system costs will continue to pressure commercial liability lines.
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