The U.S. property & casualty (P&C) insurance industry saw an improved year-over-year financial performance in the first quarter of 2026, with insurers posting a strong 92.4 combined ratio alongside a significant deceleration in premium growth, Verisk data revealed.
According to key financial indicators for private U.S. P&C insurers, from both Verisk and American Property Casualty Insurance Association (APCIA), the industry posted an estimated net underwriting gain of approximately $15.8 billion in Q1 2026.
This was a strong rebound from the $864 million underwriting loss in Q1 2025, which was heavily impacted by large-scale catastrophe activity, including the Palisades and Eaton wildfires.
The industry’s overall health was reflected in a strong combined ratio of 92.4%, down from 99.2% in the same period last year.
This dramatic swing from losses to gains mirrors the volatility seen in recent years, such as the leap from a $7.8 billion loss in Q1 2023 to a $9.5 billion gain in Q1 2024.
First-quarter results were primarily driven by continued momentum in personal auto underwriting, alongside a more stable catastrophe experience relative to the prior year.
Reflecting a departure from previous auto rate hikes, some insurers have opted to return personal auto premiums by increasing policyholder dividends. Meanwhile, other insurance lines remain under pressure amidst varied broader market conditions..
Robert Gordon, senior vice president, policy, research and international, APCIA, said: “Industry profitability improved in 2025 and the first quarter of 2026, driven largely by moderating inflation and an unusual respite from natural catastrophes over the past 12 months. In good news for policyholders, premium increases continued to slow.
“Net written premium growth slowed sharply to 2.9% in Q1 2026, down from 9.6% in Q1 2024 and 6.8% in Q1 2025. When factoring in inflation and $6.2 billion returned to policyholders through dividends, written premiums have effectively declined in 2026.”
Adding: “Net income bounced back in Q1 2026 following a 50% decline in Q1 2025. At the same time, legal system abuse and rising claims severity continue to be among the industry’s most significant headwinds. States such as Florida that have enacted meaningful legal system abuse reforms are beginning to see progress, including stabilisation and reductions in auto and homeowners’ insurance rates.”
The underwriting industry financial results for Q1 2026 also include a 3.6% rise in net earned premiums, compared to 7.8% during the same period in 2025. Incurred losses and loss adjustment expenses decreased by 9.6%, compared to a 15.5% increase in Q1 2025.
Policyholders’ surplus increased to $1.24 trillion from $1.09 trillion during the same period in 2025. Realised capital gains increased to $8.8 billion, compared to $3.7 billion in Q1 2025, and net income after taxes increased to $40.9 billion from $19.4 billion in the same period last year.
