California Wildfires Drive $1.1 Billion First-Quarter Loss for US Insurers

The US property-casualty insurance sector posted a $1.1 billion net underwriting loss in the first quarter of 2025, reversing a $9.4 billion gain in the same period last year, according to a recent report from AM Best. The decline was driven largely by catastrophe losses tied to January's wildfires in California. 

The findings, published in Best's Special Report, "First Look: Three-Month 2025 US Property/Casualty Financial Results," are based on statutory statements received by May 29, 2025, covering approximately 96 percent of the industry's net premiums written. According to the report, catastrophe losses added an estimated 14.7 percentage points to the segment's combined ratio, a sharp increase from 5.4 points in the first quarter of 2024. As a result, the combined ratio deteriorated to 99.4 from 94.4 year over year. 

Net premiums written rose by 2.8 percent in the quarter, which AM Best attributed to rate increases across several commercial and personal lines segments. However, the benefits of premium growth were more than offset by the surge in catastrophe-related claims. According to AM Best, personal lines remained particularly pressured, with homeowners insurance facing the brunt of wildfire losses. 

Despite a 2.4 percent increase in net investment income, pre-tax operating income dropped 34.4 percent to $19.6 billion. AM Best reported that the industry's net realized capital gains plunged 74.6 percent from the prior-year period, driven largely by a $10.5 billion decline at National Indemnity Company. That drop significantly affected the industry's bottom line, contributing to a 50.4 percent decline in overall net income, which fell to $19.8 billion. 

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