Fitch Ratings’ review of 2025 GAAP financial results for 41 North American property and casualty re/insurers found that operating returns remained at favourable levels, supported by strong underwriting results and investment income growth.
The group’s overall operating return on common equity was 10.9% in 2025, down from 11.1% in 2024, with nearly all sectors still delivering double-digit returns. Catastrophe-related volatility subsided in the second half of 2025, driving particularly strong returns among Florida homeowners specialists and personal lines writers.
Despite the devastating California wildfires in January 2025, overall catastrophe losses declined by 8%. As a result, the group’s combined ratio increased by 4.5 points in 2025, an improvement from 5.2% in 2024.
While the reinsurer group absorbed the highest proportion of catastrophe losses, it reported improved underwriting performance, with a combined ratio of 93.0% in 2025, down from 93.9% in 2024, benefiting from a favourable pricing environment.
Group common shareholders’ equity increased 13% in 2025, reflecting positive net earnings and a narrowing of unrealised bond gain (loss) positions. Growth was moderated by a 19.5% increase in capital returned to investors. Capital returns rose despite the absence of $2.9 million in share repurchases by Berkshire Hathaway Corporation (BRK) in the prior year. Excluding BRK, the group’s capital return increased by 31.2% in 2025.
Reserve releases improved the combined ratio by 2.3 percentage points in 2025, up from 1.3 points the previous year, reflecting continued favourable prior-year development.
Social inflation continued to drive loss cost trends, particularly in commercial auto, general liability, and excess casualty lines, leading several re/insurers to report modest reserve charges in 2025. However, significant workers’ compensation reserve releases offset much of this adverse development.
Core fixed-income portfolio returns remained strong in 2025, with higher yields and larger invested asset balances driving investment income to $74 billion, up 9% year over year. The annualised aggregate investment yield remained stable at 3.9%, levelling off after rising sharply over the previous two years in a favourable rate environment.
