Insurers Report $11.5 Billion Underwriting Gain Despite Ongoing Pressures

US property-casualty insurers posted an $11.5 billion underwriting gain in the first half of 2025, according to data released by Verisk and the American Property Casualty Insurance Association (APCIA). Despite headwinds from inflation, catastrophic weather, and line-specific pressures, the industry showed improved profitability over the same period last year.

The first quarter of 2025 saw above-average losses, driven by the Palisades and Eaton wildfires. However, second-quarter results stabilized as no major natural catastrophes occurred. Total incurred losses and loss adjustment expenses increased by 2.1 percent at midyear, compared to a 2.4 percent increase at the same point in 2024. The combined ratio improved to 96.4 percent, down from 97.6 percent a year earlier.

Net written premiums rose 1.9 percent, totaling $472 billion, up from $464 billion in the first half of 2024. Earned premiums increased by 3.9 percent, reaching $453 billion. Realized capital gains dropped significantly to $6.8 billion from $58.1 billion last year, though this comparison is skewed by one insurer's outlier gains in 2024. Adjusted for that anomaly, investment gains remained stable.

The policyholders' surplus in the first half of 2025 reached $1.08 trillion, compared to $1.07 trillion at midyear 2024. Surplus levels remain historically high, indicating insurers' continued ability to meet policyholder obligations.

Robert Gordon, senior vice president, policy, research, and international at APCIA, said, "Net written premiums growth slowed to 1.9 percent. The lack of any significant natural catastrophes in the second quarter helped offset the record-breaking catastrophe losses related to the California wildfires and severe convective storms impacting Texas and Georgia earlier in the year."

Saurabh Khemka, copresident of underwriting solutions at Verisk, said, "Insurers are navigating a new era of risk, where extreme weather events are no longer anomalies and frequency perils are now persistent stressors on underwriting performance, as discussed in Verisk's 2025 Global Modeled Catastrophe Losses report."

"While some lines are showing signs of improvement, the broader industry continues to walk a fine line. Combined ratio has edged down slightly from this time last year, reflecting underwriting discipline, but escalating catastrophe losses—most notably January's unprecedented California wildfires—underscore the volatility ahead. Predictive analytics, granular data, and adaptive pricing strategies can help insurers respond to a rapidly evolving risk landscape," Mr. Khemka said.

The figures are based on annual statements filed by private US property-casualty insurers, excluding state workers compensation funds, residual market insurers, the National Flood Insurance Program, and foreign insurers. The data covers about 97 percent of US business written by these insurers. All figures are net of reinsurance unless otherwise stated.