U.S. insurers see profit surge amid shift toward AI underwriting

U.S. property and casualty insurers experienced a significant financial turnaround in 2025. According to AM Best, U.S. mutual insurers saw net income reach $42.6 billion, doubling the previous year's results. This growth was driven by a shift from a $7.2 billion underwriting loss in 2024 to a $14.8 billion underwriting gain in 2025, supported by rate increases, restructured discounts, and higher deductibles implemented in previous years.

To manage increasing volatility from inflation, geopolitical shocks, and climate change, insurers are increasingly turning to artificial intelligence and machine learning. Rather than relying on broad segment averages, companies are moving toward granular, policy-level underwriting. McKinsey estimates that this precision could boost underwriting results by 30% to 50%. Insurtech firms like Soteris are already utilizing machine learning to score the profitability of individual policies to identify potential losses before they occur.