U.S. P/C Insurance Industry Shows Strong Underwriting Income in H1 2025

The U.S. property and casualty (P/C) insurance industry reported a net underwriting income of $11.2 billion in the first half of 2025, a marked increase from $2.9 billion during the same period in 2024, according to an AM Best Special Report. This improvement is primarily credited to a growth of 7.5% in net earned premiums, which helped offset rising incurred losses, loss adjustment expenses, and underwriting costs during the period.

Catastrophe losses, particularly from the January 2025 California wildfires, accounted for 10.9 percentage points of the combined ratio, which improved to 96.4 from 97.8 year-over-year. Despite these underwriting gains, the industry's net income fell nearly 50% to $50.3 billion, due largely to a significant reduction in realized capital gains.

Notably, National Indemnity Company experienced a $47.5 billion decline in capital gains, impacting overall net income. The industry's financial results were also bolstered by an increase in net investment income, lifting pre-tax operating income by nearly 25%. The AM Best report is based on statutory statements from companies representing approximately 96% of total industry net premiums written as of August 26, 2025. This data offers insight into the market dynamics, highlighting the balance between underwriting profitability and investment performance in the P/C insurance sector amid heightened catastrophe activity and fluctuating capital markets.