US P&C Insurers Rebound in Q1 as Combined Ratio Improves

The US property/casualty (P&C) insurance industry posted stronger financial results in the first quarter of 2026, with an estimated net underwriting gain of $15.8 billion, compared with an $864 million underwriting loss during the same period in 2025, according to Verisk and the American Property Casualty Insurance Association (APCIA).

The improvement followed a first quarter in 2025 that was heavily affected by large catastrophe losses, including the Palisades and Eaton wildfires. The 2026 results also reflected continued gains in personal auto underwriting and a more moderate catastrophe environment.

The industry's combined ratio improved to 92.4 percent from 99.2 percent a year earlier as incurred losses and loss adjustment expenses declined 9.6 percent after increasing 15.5 percent during the first quarter of 2025.

Premium growth slowed considerably. Net written premiums increased 2.9 percent, down from 6.8 percent in the first quarter of 2025 and 9.6 percent in the first quarter of 2024. Net earned premiums rose 3.8 percent, compared with 7.8 percent during the prior-year period. Policyholders also received $6.2 billion in dividends during the quarter.

"Industry profitability improved in 2025 and the first quarter of 2026, driven largely by moderating inflation and an unusual respite from natural catastrophes over the past 12 months," Robert Gordon, senior vice president, policy, research, and international at APCIA, said.

He continued, "In good news for policyholders, premium increases continued to slow. Net written premium growth slowed sharply to 2.9 percent in Q1 2026, down from 9.6 percent in Q1 2024 and 6.8 percent in Q1 2025. When factoring in inflation and $6.2 billion returned to policyholders through dividends, written premiums have effectively declined in 2026."

Mr. Gordon also said net income recovered after falling 50 percent in the first quarter of 2025, but warned that legal system abuse and rising claims severity remain significant challenges. He said states that have adopted legal system abuse reforms, including Florida, are beginning to see stabilization and reductions in auto and homeowners insurance rates.

Other financial indicators also strengthened. Policyholders' surplus increased to $1.24 trillion from $1.09 trillion a year earlier. Realized capital gains rose to $8.8 billion from $3.7 billion, while net income after taxes increased to $40.9 billion from $19.4 billion.

Verisk said results varied across business lines despite the overall improvement.

"First-quarter results reflected meaningful improvements, most notably in personal auto, but slower premium growth and continued pressure in casualty underscore an uneven recovery across the market," Saurabh Khemka, president of Verisk Underwriting Solutions, said.

Mr. Khemka said the industry's performance will be tested during the 2026 hurricane season and that insurers are increasingly relying on granular data and artificial intelligence to improve underwriting decisions, pricing, and portfolio management.

The results are based on quarterly regulatory filings representing approximately 98 percent of business written by private US P&C insurers, according to Verisk and APCIA.