The U.S. property and casualty (P&C) industry recorded $31.2 billion in net underwriting income in the first half of 2026, nearly triple the $10.9 billion reported in the same period a year earlier, according to a recent report by AM Best.
The report revealed that the P&C industry saw a 3% increase in net earned premiums and a 5.1% decline in incurred losses and loss adjustment expenses, offsetting a $4.9 billion increase in dividends to policyholders – predominantly due to $5 billion of dividends to policyholders at State Farm.
The industry’s combined ratio improved by four percentage points to 92.5%, with catastrophe losses estimated to account for 6.2 percentage points of the H1 2026 combined ratio, down from an estimated 10.8 percentage points in H1 2025, which was heavily impacted by the January California wildfires.
A 12.3% increase in net investment income, combined with the underwriting gain, nearly doubled pre-tax operating income to $79.1 billion.
A significant 88.7% increase in net realised capital gains also contributed to the industry’s net income, which increased 55% from the same period a year earlier to $77.8 billion.
AM Best reported that industry surplus increased 7.1% from the end of 2025 to $1.3 trillion, as a combined $109.4 billion of net income, changes in unrealised gains and contributed capital was reduced by $24.3 billion of other surplus losses and stockholder dividends.
