Verisk and the American Property Casualty Insurance Association (APCIA) released a joint report detailing the U.S. property/casualty insurance industry’s performance for the first half of 2025. The report highlights underwriting gains, improved profitability metrics, and continued financial strength, while also noting persistent challenges from extreme weather, inflation, and line-specific pressures.
Half-Year Results and Key Financials
- Underwriting gains: The industry recorded an estimated net underwriting gain of $11.5 billion through midyear 2025, up from $3.8 billion in the same period of 2024.
- Premiums written and earned: Insurers wrote $472 billion in premiums during the first half of 2025, compared to $464 billion in 2024. Earned premiums grew 3.9 percent to $453 billion.
- Combined ratio: Improved to 96.4 percent in the first half of 2025, compared to 97.6 percent during the same period last year.
- Incurred losses and expenses: Increased by 2.1 percent at midyear 2025, slightly lower than the 2.4 percent increase seen at midyear 2024.
- Surplus levels: Policyholders’ surplus rose to $1.08 trillion, up from $1.07 trillion in 2024, reflecting historically strong capital positions.
- Capital gains: Realized capital gains declined sharply to $6.8 billion in 2025, compared to $58.1 billion in 2024. When adjusted for one large insurer’s 2024 gains, overall investment results remained stable.
First- and Second-Quarter Trends
The first quarter was marked by elevated losses, largely due to the Palisades and Eaton wildfires, which exceeded historical averages. However, second-quarter results stabilized as catastrophe losses lessened in magnitude. The absence of significant natural catastrophes in Q2 helped offset earlier events, including record-breaking wildfires in California and severe storms in Texas and Georgia.
Industry Perspectives
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APCIA’s view: Robert Gordon, senior vice president of policy, research, and international, noted that net written premium growth slowed to 1.9 percent. He emphasized that the lack of major catastrophes in Q2 aided results but cautioned that the hurricane and wildfire season could impact outcomes later in the year.
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Verisk’s view: Saurabh Khemka, co-president of Underwriting Solutions, highlighted that while some insurance lines are showing improvement, overall volatility remains a concern. He pointed to January’s California wildfires as an example of escalating catastrophe losses and underscored the importance of predictive analytics and adaptive pricing in managing risk.
Ongoing Challenges
The report emphasized that despite strong surplus levels and midyear underwriting profitability, insurers continue to face long-term pressures. Key challenges include:
- Inflationary impacts on claims costs
- Climate-related volatility and frequency of severe weather events
- Line-specific stressors affecting profitability across certain insurance segments
About the Report
The figures are based on statements filed with regulators by private U.S. property/casualty insurers, including reinsurers, excess and surplus insurers, and domestic insurers owned by foreign parents. They exclude state workers’ compensation funds, residual market insurers, the National Flood Insurance Program, and foreign insurers. The data reflects consolidated estimates accounting for about 97 percent of business written by U.S. property/casualty insurers.
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