P/C Industry Nets $34.9B Underwriting Gain as Cat Losses Ease in 2025

U.S. property and casualty insurers posted a significant underwriting gain of $34.9 billion through the first nine months of 2025, according to AM Best. This marks a substantial recovery from 2024’s $3.7 billion result and reflects improved loss ratios, more favorable reserve development, and reduced catastrophe losses—cat losses contributed 8.0 points to the combined ratio, down from 8.7 last year. For claims professionals, this shift suggests both improved accuracy in pricing risk and greater stability in loss development trends.

The industry’s combined ratio improved to 94.0, mirroring Fitch’s earlier findings. Notably, the favorable loss reserve development added $18 billion in positive impact to 2025 results. Though overall direct written premium growth slowed to 5.6 percent from 10 percent in 2024, commercial auto liability and other liability-occurrence lines continued double-digit growth. Conversely, growth in personal auto liability and physical damage slowed sharply, reflecting shifts in exposure and rate adequacy.

Investment income increased 5.9 percent, and despite a major drop in capital gains—led by Berkshire Hathaway’s results—industry surplus climbed 6.8 percent to reach $1.2 trillion. Claims professionals should note that while underwriting performance has improved, shifting premium trends and lower catastrophe pressure may influence future claims volume and handling priorities into 2026.