North American (re)insurers delivered strong profitability in 2025. According to Fitch Ratings, the sector recorded an operating return on common equity of 11%. The result sits slightly below the 11.1% reported in 2024.
Most insurance segments maintained double-digit returns. Florida homeowners specialists and personal lines carriers posted improved performance after catastrophe losses eased during the second half of the year.
Catastrophe losses fell 8% during 2025 despite elevated activity early in the year linked to wildfires in Southern California.
Natural catastrophe events increased the group’s combined ratio by 4.5 percentage points. The figure improved from a 5.2-point impact recorded in 2024.
Reinsurers absorbed the largest share of catastrophe losses. Even so, underwriting results strengthened compared with the previous year.
The reinsurance segment reported a combined ratio of 93.0%, improving from 93.9% in 2024.
Reserve developments also supported underwriting performance. Favorable reserve releases improved the combined ratio by 2.3 percentage points in 2025, up from 1.3 points in the prior year.
Loss trends in several liability lines remained challenging. Social inflation continued pushing claim severity higher in commercial auto, general liability, and excess casualty insurance.
According to Beinsure analysts, the trend reflects rising litigation costs and larger jury awards across U.S. liability markets.
Workers’ compensation reserves moved in the opposite direction. Significant reserve releases in that segment offset a large portion of the adverse loss development elsewhere.
Investment performance provided another earnings driver. Aggregate investment yields remained stable near 3.9%.
Total investment income increased 9% to $74bn, supported by higher interest rates and larger invested asset portfolios.
