AM Best Report Shows US P&C Industry Returns to Underwriting Profit

The US property and casualty (P&C) insurance industry posted a $16.3 billion net underwriting gain in the first quarter of 2026, compared with a $1.0 billion underwriting loss in the same period a year earlier, according to AM Best's report, "First Look: Three-Month 2026 US Property/Casualty Financial Results." The report is based on companies' annual statutory statements received as of June 1, 2026, representing an estimated 97 percent of the industry's total net premiums written, according to AM Best.

The improvement in underwriting results followed a first quarter in 2025 that was affected significantly by California wildfire losses. Catastrophe losses declined substantially in the first 3 months of 2026 and accounted for 4.2 points on the industry's combined ratio, down from an estimated 14.5 points in the prior-year period, according to the report.

As a result of lower catastrophe losses, the industry's combined ratio improved to 92.0 in the first quarter of 2026 from 99.0 in the first quarter of 2025, according to AM Best. The seven-point improvement reflected stronger underwriting performance across the period.

The report also found that investment income contributed to overall earnings growth. Net investment income increased 10.3 percent year over year and, when combined with the underwriting gain, helped drive pre-tax operating income to $39.5 billion, according to the report.

Pre-tax operating income rose 97.0 percent compared with the first quarter of 2025, reflecting the combined effect of improved underwriting results and higher investment income, per AM Best.

Net realized capital gains also increased during the quarter. According to the report, net realized capital gains more than doubled in the first quarter of 2026 compared with the same period a year earlier.

The increase in realized capital gains contributed to a substantial rise in overall profitability. Net income reached $41.8 billion in the first quarter of 2026, representing a 107.7 percent increase from the first quarter of 2025, according to AM Best.

Copyright © 2026 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.