US property/casualty insurers returned $6.2 billion to policyholders in Q1 2026, the clearest sign yet that a two-year underwriting recovery is flowing through to consumers.
The industry posted a $15.8 billion net underwriting gain for the quarter, reversin an $864 million loss in the same period last year, according to a new data from Verisk and the American Property Casualty Insurance Association (APCIA).
The combined ratio improved to 92.4% from 99.2% in Q1 2025. Incurred losses and loss adjustment expenses fell 9.6% year over year. Q1 2025 had been weighed down by the Palisades and Eaton wildfires, which drove outsized catastrophe losses across the industry.
Net written premium growth slowed sharply to 2.9% in Q1 2026, down from 6.8% in Q1 2025 and 9.6% in Q1 2024. Net earned premiums rose 3.8%, compared to 7.8% in the same period last year.
APCIA senior vice president Robert Gordon said that when factoring in inflation and those dividends, written premiums have effectively declined in 2026. He described the shift as a direct benefit for policyholders after several years of rate increases.
The Q1 result extends a recovery that built steadily through 2025. Private U.S. P&C insurers posted an estimated $63 billion net underwriting gain for full-year 2025. That compared to a $23 billion gain in 2024 and a $22 billion underwriting loss in 2023. The full-year combined ratio came in at 92.9%, down from 96.6% in 2024.
“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,” Gordon said. “In good news for policyholders, premium increases continued to slow.”
Gordon also said legal system abuse and rising claims severity remain among the industry’s most significant headwinds. He pointed to Florida’s legal reform efforts as producing early results, with auto and homeowners’ insurance rates beginning to stabilize and fall.
That headwind carries real weight in the numbers. The median nuclear jury award in US liability cases reached around $44 million in 2023, nearly double the 2020 figure, according to APCIA. Global capital committed to third-party litigation funding stood at roughly $13 billion and is projected to exceed $50 billion by the mid-2030s.
Net income after taxes rose to $40.9 billion from $19.4 billion in Q1 2025. Policyholders’ surplus increased to $1.24 trillion from $1.09 trillion. Realized capital gains reached $8.8 billion, up from $3.7 billion in Q1 2025.
Recovery across lines was uneven. Personal auto drove much of the improvement, while casualty lines continued to face pressure.
“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,” said Saurabh Khemka, president of Verisk Underwriting Solutions.
“Heading into the 2026 hurricane season, a critical focus for the industry is the potential for catastrophic activity to impact full-year performance.”
Khemka said carriers are applying more granular data and AI to improve how risks are selected, priced, and managed across portfolios. That precision, he said, is important for protecting margins as market conditions develop.
NOAA issued the most favorable Atlantic hurricane forecast in more than a decade for 2026. It put the probability of below-normal activity at 55%, with eight to 14 named storms expected.
Despite that outlook, primary carriers are holding firm on wind and named-storm deductibles in high-hazard coastal zones. Swiss Re’s internal models put a 10% probability on a peak-loss year reaching $320 billion.
