U.S. Insurance Sector Gains $35.3 Billion in Underwriting Profit in 2025

In the first three quarters of 2025, the U.S. insurance sector reported a remarkable net underwriting gain of $35.3 billion, a significant leap from the $4 billion gain in the same period of 2024, as highlighted by a report from Verisk and the American Property Casualty Insurance Association. This growth signals important trends in regulatory compliance requirements and strategic risk management practices, benefiting both insurance providers and policyholders.

Premium Growth and Underwriting Performance

The substantial gains in 2025 are largely attributed to an increase in premiums and a decrease in losses due to fewer extreme weather events. Net written premiums saw a 5.1% rise, reaching $740.7 billion in the first nine months, compared to $704.8 billion in 2024. This growth is linked to improved underwriting strategies, emphasizing the significance of actuarial analysis and claims management in mitigating risks.

Financial Metrics and Investment Challenges

The industry's combined ratio improved to 94.0% from the previous year's 97.9%, marking the decade's first instance where this ratio dropped below 95% by the third quarter. Although the policyholder surplus increased to $1.20 trillion from $1.12 trillion, net income declined by 23.7%, totaling $98.74 billion. This decline is primarily due to a 42.3% reduction in net investment gains, amounting to $78.97 billion, reflecting the challenges in navigating investment return fluctuations.

These financial insights underline the U.S. insurance industry's notable advancements in underwriting performance and the ongoing challenges in ensuring strong returns. The sector's focus on compliance, carrier strategy, and risk assessment will be critical as it strives for sustainable growth and profitability.