The US property & casualty insurance industry reported a $34.9 billion net underwriting gain for the first nine months of 2025, compared with a $3.7 billion gain in the same period a year earlier, according to AM Best.
The improvement came as net premiums earned rose 7% and underwriting results benefited from relatively low catastrophe activity in the third quarter.
AM Best noted that incurred losses and loss adjustment expenses for the nine-month period were roughly in line with the prior year, despite the premium growth. Muted catastrophe losses helped limit volatility, supporting more stable underwriting margins across the sector.
The industry’s combined ratio improved to 94.0 for the first nine months of 2025, AM Best reported. The rating agency estimated that catastrophe losses contributed 8.0 points to the combined ratio, down from an estimated 8.7 points in the prior-year period, indicating a reduced catastrophe load on results.
Read more: US P&C industry to outpace economy
The nine-month figures also align with broader projections that the US P&C sector will expand faster than the overall economy in 2025, according to the Insurance Information Institute (Triple-I) and Milliman.
Their outlook calls for US GDP growth of 1.6% this year, compared with underlying P&C growth of 2.4%.
Excluding $18.0 billion of favorable reserve development recorded in the first three quarters, the industry’s accident-year combined ratio stood at 96.5. AM Best said this shows that while calendar-year results were supported by reserve releases, underlying current-year performance remained in a profitable range on an accident-year basis.
On the investment side, earned net investment income increased 5.9%, which, together with the underwriting gain, drove a 51.9% rise in pretax operating income to $102.4 billion. However, net realized capital gains fell sharply, declining 80%, largely due to a combined $60.5 billion drop at three Berkshire Hathaway companies, which weighed on reported net income.
That reduction in realized gains contributed to a 23.3% decrease in industry net income, which fell to $100.9 billion for the nine-month period. AM Best’s analysis suggests that core operating trends strengthened even as bottom-line profitability was influenced by capital market movements.
Catastrophe experience over the year also shaped results at a line-of-business level, with Triple-I highlighting that improved homeowners’ performance in the second quarter helped close the gap between personal and commercial lines after significant fire losses in Los Angeles earlier in 2025.
Policyholder surplus rose 6.8% from year-end 2024 to reach $1.2 trillion, supported by a combined $131.3 billion from net income, changes in unrealized gains, and contributed capital.
This growth was partly offset by $20.5 billion in other surplus losses and stockholder dividends, reflecting ongoing capital management and market factors across the US P&C segment, according to AM Best.
