Six-Month Review

An early look by AM Best at the financial results of the U.S. property/casualty industry revealed insurers recorded an estimated $11.2 billion in net underwriting income in the first half of 2025.

That’s a significant jump from last year when the P/C industry booked $2.9 billion in the first six months, according to a report from the rating agency.

In a separate report, the American Property Casualty Insurance Association and Verisk reported the U.S. property/casualty insurance industry recorded a net underwriting gain of $11.5 billion and net income of $49.1 billion for the first half of 2025. “The lack of any significant natural catastrophes in the second quarter helped offset the record-breaking catastrophe losses related to the California wildfires and severe convective storms impacting Texas and Georgia earlier in the year,” said Robert Gordon, senior vice president, policy, research, and international at the APCIA and Verisk, when discussing the results.

AM Best noted that the P/C industry’s combined ratio improved to 96.4 in first-half 2025 from 97.8 in the same period of 2024.

APCIA/Verisk estimated first-half 2025’s combined ratio to be 96.4 compared to 97.6 for last year’s first half, and 104.2 for first-half 2023.

The combined ratio “edged down slightly from this time last year, reflecting underwriting discipline, but escalating catastrophe losses–most notably January’s unprecedented California wildfires–underscore the volatility ahead,” said Saurabh Khemka, co-president of underwriting solutions at Verisk. “While some lines are showing signs of improvement, the broader industry continues to walk a fine line,” Khemka said.

AM Best reported that catastrophe losses accounted for 10.9 points on the six-month 2025 combined ratio, up from an estimated 8.8 points the previous year.

However, excluding prior-year reserve development of nearly $13 billion, the combined ratio was 99.2, according to AM Best.

Growth of 7.5% in net earned premiums in the six-month period offset increases in incurred losses and loss adjustment expenses (LAE), largely attributable to the January wildfires in California and other underwriting expenses. Plus, an increase in net investment income aided the underwriting gain.

A substantial reduction in net realized capital gains, driven primarily by a $47.5 billion decline at Berkshire Hathaway’s National Indemnity Company, contributed to the industry’s net income being cut nearly in half from the same prior-year period to $50.3 billion.

Based on information from annual statements submitted to insurance regulators by insurers representing roughly 97% of the private U.S. property/casualty market, Verisk and APCIA reported that net written premiums grew just 1.9% to $472.5 billion compared to a 10.6% increase in net written premiums recorded for first-half 2024 over the prior-year six-month period.

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