US Property & Casualty Insurers Record Best Underwriting Profit in a Decade

In 2025 the United States property‑and‑casualty (P&C) insurance sector posted its strongest underwriting profit and lowest combined ratio in a decade, according to AM Best. Underwriting income rose to about $61.2 billion, driven by personal lines that generated $45.7 billion of profit and accounted for 51% of total direct premiums written. Total direct premiums grew 5% to roughly $1.11 trillion and the industry combined ratio improved to 93, a 3.6‑point gain over 2024.

The turnaround began in 2024 and continued despite early‑year losses from California wildfires. Personal auto and homeowners lines benefited from technology, data analytics and accelerated rate filings, while commercial lines posted a $19.2 billion profit overall. However, commercial auto remained loss‑making with a $1.9 billion deficit, and liability lines recorded a $11 billion underwriting loss, reflecting rising social inflation, litigation costs and reserve deficiencies of about $2 billion. AM Best noted developing PFAS claims and new exposure risks from AI‑driven class actions. The agency maintains a stable outlook for personal lines but a negative outlook for liability and other commercial lines.