2025 Underwriting Results: A Recalibration for the Insurance Sector
Verisk and the American Property Casualty Insurance Association (APCIA) have unveiled preliminary 2025 underwriting results for the property/casualty sector, marking a $40 billion increase from 2024. For private U.S. property and casualty insurers, underwriting gains in 2025 reached $63 million, starkly contrasting the $23 billion gain in 2024 and a $22 billion loss in 2023.
Saurabh Khemka, President of Verisk Underwriting Solutions, attributed the industry's strong 2025 performance primarily to a significant reduction in catastrophe losses rather than changes in risk assessment strategies. This reduction was largely driven by a dramatic 90% decrease in hurricane-related claims, resulting from fewer U.S. landfalls. Consequently, the combined ratio improved to 92.9 from the previous year's 96.6. Additionally, net written premiums saw a 4.8% rise, reaching $971 billion compared to the previous year.
Khemka noted improvements in personal auto and other lines, credited to strategic rate adjustments and tighter underwriting practices. However, commercial liability lines continued to challenge the industry's overall performance. He emphasized that 2025 served as a recalibration year following volatility rather than a new industry benchmark. Challenges such as rising construction material costs, labor expenses, and increasing severe storm frequency persist.
APCIA’s Senior Vice President of Policy, Research, and International, Robert Gordon, reported a decrease in net income to $148 billion from $169 billion in 2024, impacted partially by lower realized capital gains. He remarked on the significant variation in market performance across states and lines of business. In Florida, legal reforms led to lower homeowners and auto insurance losses and rates, although contractors' liability loss ratios remained elevated. Legal challenges continue to impact commercial liability lines, with ongoing adverse reserve additions in segments like commercial auto liability. Despite a slowdown in personal lines premium growth in 2025, issues like inflation, demographic shifts, natural disaster severity, and legal pressures are anticipated to continue.
These insights highlight the evolving dynamics within the insurance market, underscoring both areas of strength and emerging concerns as the industry addresses economic and environmental challenges.