U.S. Property/Casualty Insurance Posts $35B Underwriting Gain in First Nine Months of 2025
The U.S. property/casualty (P/C) insurance sector recorded a significant underwriting gain of $35 billion in the first nine months of 2025, according to AM Best's preliminary financial results. This marks a substantial improvement over the nearly $4 billion gain reported in the same period in 2024. The positive performance is attributed primarily to muted catastrophe losses in the third quarter of 2025, which moderated loss and loss adjustment expenses despite a 7% rise in net premiums written. AM Best's report highlights that the combined ratio for the P/C industry improved by four percentage points to 94.0 for the nine-month period, driven by a reduction in catastrophe loss impact from an estimated 8.7 percentage points in 2024 to 8.0 points in 2025. This improvement in underwriting performance, coupled with a 5.9% increase in net investment income, supported a 52% rise in pretax operating income, which reached $102.4 billion. Despite these gains, the industry saw a 23% decline in net income to $100.9 billion compared to the prior year, largely due to an 80% reduction in net realized capital gains. A notable factor in this decline was the combined $60.5 billion decrease in capital gains reported by three Berkshire Hathaway companies. The data compiled by AM Best covers approximately 98% of U.S. industry net premiums written, based on companies’ nine-month interim statutory statements received by December 1, 2025. This comprehensive industry overview provides critical insight into financial trends affecting policyholders, insurers, and stakeholders navigating the U.S. P/C insurance market. The report signals a stabilizing underwriting environment amidst fluctuating investment returns, underscoring the ongoing influence of catastrophe losses and capital market performance on the sector's profitability. These preliminary results can inform pricing strategies, risk management practices, and regulatory oversight as the industry progresses through the remainder of 2025.