US P&C Underwriting Income Nearly Triples in First Half of 2026

The US property/casualty insurance industry recorded $31.2 billion in net underwriting income during the first half of 2026, according to AM Best's report, "First Look: Six-Month 2026 US Property/Casualty Financial Results." The preliminary data came from companies whose statutory statements had been received as of August 24, representing an estimated 97 percent of industry net premiums written and 95 percent of policyholder surplus.

Net underwriting income increased 186.5 percent from the $10.9 billion reported during the same period in 2025, per the report. Net premiums earned rose 3 percent to $473.2 billion, while incurred losses and loss adjustment expenses declined 5.1 percent to $310.7 billion.

Underwriting expenses increased 4.5 percent to $125.1 billion, and policyholder dividends rose to $6.2 billion from $1.3 billion a year earlier, according to AM Best. The increase in policyholder dividends was predominantly attributable to $5 billion of dividends at State Farm.

The industry's reported combined ratio improved 4 percentage points to 92.5 from 96.5 during the first half of 2025, according to the report. The pure loss ratio declined 5.4 points to 56.8, while the loss and loss adjustment expense ratio fell 5.6 points to 65.7.

Catastrophe losses accounted for an estimated 6.2 points of the first-half 2026 combined ratio, compared with 10.8 points during the prior-year period, per AM Best. Catastrophe losses in the first half of 2025 reflected the effects of the California wildfires in January of that year.

After excluding $16.6 billion of favorable reserve development, the industry's reported accident-year combined ratio was 96, according to the report. The normalized combined ratio, which adjusts for catastrophe losses, asbestos and environmental losses, and core reserve development, increased to 86.2 from 85.6. The normalized accident-year combined ratio rose to 89.8 from 88.4.

Net investment income increased 12.3 percent to $47.3 billion during the first 6 months of 2026, according to AM Best. The higher investment income and underwriting gain raised pretax operating income 47.2 percent to $79.1 billion from $53.7 billion in the prior-year period.

Net realized capital gains increased 88.7 percent to $12.7 billion from $6.7 billion, per the report. The industry's net income rose 55 percent to $77.8 billion, while federal and foreign income taxes increased 36.3 percent to approximately $14 billion.

Policyholders' surplus reached $1.28 trillion at the end of the first half, an increase of 7.1 percent from year-end 2025 and 14.8 percent from the first half of 2025, according to AM Best. Net income, $30.6 billion in unrealized capital gains and $1 billion in contributed capital supported the increase, while stockholder dividends totaled $22.8 billion.

Total invested assets increased to $2.72 trillion, including $1.49 trillion in bonds and $734.5 billion in preferred and common stocks, according to the report. Total assets reached $3.25 trillion, while total loss and loss adjustment expense reserves exceeded $1 trillion.

Net cash from operations totaled $83.8 billion during the first half of 2026, compared with $75.3 billion in the same period of 2025, per AM Best. After investment and financing activity, net cash flow was negative $15.4 billion, and cash and short-term investments ended the period at $255.8 billion.

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