The US property and casualty (P&C) industry recorded a $60.9 billion net underwriting gain in 2025, a significant increase from the $22.1 billion gain generated in the previous year, reports AM Best.
According to the global rating agency’s First Look: 2025 US Property/Casualty Financial Results, these improved results were driven by a 6.1% increase in net earned premiums and a decline in incurred losses and loss adjustment expenses, aided by relatively quiet catastrophe losses during 2025, notably in the second half of the year.
The report offers early insight into the sector’s current financial state, using 2025 annual statutory statements received by March 9th, 2026.
This data represents an estimated 96% of total industry net premiums written and 94% of policyholders’ surplus, explains AM Best.
The report also reveals improvement in the industry’s combined ratio, which decreased to 92.9%. AM Best estimates that catastrophe losses accounted for 7.6 points on the 2025 combined ratio, down from an estimated 8.8 points in the prior year.
Excluding $18.1 billion of favourable reserve development during 2025, the industry’s accident year combined ratio was 94.9%.
Boosted by underwriting success and a 9.1% increase in investment income, pre-tax operating income increased 43.2% to $153.1 billion in 2025. However, while operating performance was strong, the US P&C industry’s total net income fell by 9.5% year-on-year to $150.9 billion.
AM Best attributed this decline mainly to a 71.6% drop in net realised capital gains, largely influenced by a combined $60 billion decline at three Berkshire Hathaway companies.
Lastly, AM Best reports that industry surplus increased 11.4% from the end of 2024 to $1.2 trillion, as a combined $199.2 billion of net income, change in unrealised gains and contributed capital was reduced by $76.3 billion of other surplus losses and stockholder dividends.
