The nonstandard auto insurance market in 2025 certainly looks to be maintaining the momentum it gained last year, according to a new report from AM Best.
The insurance industry rating agency said U.S. private passenger nonstandard auto insurers turned in underwriting profit of $65.2 million for the first half of 2025, compared with $16.6 million during the same period a year ago.
In its Market Segment Report, AM Best said rate adequacy and leveraging technology for underwriting, claims, and distribution purposes drove profit improvement.
Nonstandard auto writers posted a H1 2025 combined ratio of 96.6 compared with a H1 2024 combined ratio of 98.
“The improved combined and loss ratios suggest insurers have raised premiums enough to better offset claim costs,” said David Blades, associate director, Industry Research and Analytics, AM Best. “In the short term, more modest price increases could still be warranted to sufficiently offset auto physical damage claim costs to replace auto parts and technology in addition to liability costs associated with increased attorney involvement in claims and uncertainty surrounding tariffs.”
The magnitude of premium increases may have peaked in 2024, with hikes of 27.6% and 24.9% in the first and second quarters compared to premium increases of 10.5% and 3.8% during the same quarters in 2025.
Topics Trends Carriers Profit Loss Auto AM Best
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