Economic Success of Property and Casualty Insurance in 2025
A recent evaluation by Public Citizen, a nonprofit organization, highlighted 2025 as the most economically successful year for the property and casualty insurance sector in over two decades. Utilizing data from the National Association of Insurance Commissioners (NAIC), the analysis revealed that P&C insurers reported $68.7 billion in underwriting income. This figure represents the difference between premiums collected and the sum of claims payouts and operating expenses.
The report notes a $25.3 billion increase in underwriting income from 2024, totaling nearly $90 billion over two years. While the industry achieved $111.6 billion in investment income, marking a decline from previous years, it showed substantial growth compared to 2016. The policyholders' surplus reached a historic $1.27 trillion, providing a buffer for insurers and ensuring financial stability beyond existing liabilities.
The industry's combined ratio was maintained at 92.9% for 2025, reflecting an underwriting profit, as any ratio below 100% indicates profitability. Public Citizen reported that insurers retained approximately $7 as profit for every $100 in premiums. The loss ratio dropped to 66.5%, illustrating that insurers paid out fewer claims relative to premiums than in previous years, despite underwriting expenses reaching $252.2 billion due to growing operational costs.
Net premiums written in the P&C sector grew to $976.8 billion, a 4.6% rise, though slower than past years which saw increases between 8% and 10%. The analysis attributed mild weather conditions as a contributing factor to financial performance, with no major hurricanes in 2025. However, the Palisades and Eaton fires in Los Angeles were significant disaster events.
Industry profitability improved with returns on surplus reaching 12.6% in 2025, a decrease from 15.2% in 2024, yet substantial compared to returns from the last decade. The report also investigated executive compensation, noting Chubb's CEO Evan Greenberg earned $33 million in 2025, a $3 million rise from the previous year, while Allstate's CEO Tom Wilson earned over $45 million.
Executives from the ten largest insurers collectively earned over $134 million in 2024, indicating a 27% increase in salaries and bonuses from the prior year. Michael Tipsord, State Farm's outgoing CEO, was highlighted as the top-earning personal lines executive in 2022 with $24.4 million. The report also points out that California remains the only state to prohibit insurers from incorporating executive pay into rate increase applications.