U.S. Property/Casualty Insurance Posts $11.5B Midyear Underwriting Gain

The U.S. property/casualty insurance industry reported a net underwriting gain of $11.5 billion for the first half of 2025, marking an improvement over the $3.8 billion gain in the same period in 2024. This gain was achieved despite persistent headwinds such as extreme weather events, inflationary pressures, and specific challenges across various lines of business. Premiums written increased to $472 billion, reflecting a 1.9 percent growth, while earned premiums rose 3.9 percent to $453 billion. The combined ratio improved to 96.4 percent from 97.6 percent a year earlier, indicating enhanced underwriting discipline.

The industry faced significant catastrophe losses during the first quarter, largely due to the Palisades and Eaton wildfires in California, along with severe storms in Texas and Georgia. However, the absence of notable natural catastrophes in the second quarter helped mitigate the impact. Surplus levels remained robust, increasing slightly to $1.08 trillion, underscoring the sector's strong financial foundation and capacity to meet policyholder obligations.

Investment income saw a sharp decline in realized capital gains, falling to $6.8 billion from $58.1 billion the previous year, although overall investment returns remained stable when adjusting for outlier gains. These results highlight the insurance industry's resilience amid volatility induced by climate-related events and inflation, emphasizing the importance of adaptive pricing strategies and predictive analytics.

Verisk and the American Property Casualty Insurance Association (APCIA) attribute the ongoing underwriting profitability to more adequate premium rates and improved investment performance despite external challenges. They note that the industry is entering a high-risk period with the hurricane and wildfire seasons underway, which could affect second-half results. The evolving risk landscape demands continued use of advanced data analytics and granular risk assessment to sustain profitability and manage emerging risks effectively.

This report is based on annual statements filed by U.S. private property/casualty insurers and excludes certain state and federal residual markets. It consolidates data from approximately 97 percent of the industry’s written business, providing a comprehensive overview of market performance. Verisk’s underwriting and rating solutions support insurers worldwide in optimizing underwriting accuracy, operational efficiency, and risk modeling amid a rapidly changing environment.