Fitch Ratings reported stronger profitability among North American insurers and reinsurers in the first half of 2026, driven by improved underwriting performance and higher investment income.
The group’s operating return on common equity increased to 11.2%, compared with 8.9% a year earlier. Nearly every insurance sector achieved double-digit operating returns.
Lower catastrophe losses contributed significantly to the improvement. Catastrophe-related claims added 3.8 percentage points to the industry’s combined ratio in 1H 2026, down from 8.0 points during the corresponding period of 2025.
The group’s aggregate combined ratio declined to 87.9% from 91.8%, indicating stronger underwriting profitability across North American (re)insurance markets.
Favorable reserve development provided additional earnings support. Reserve releases reduced the combined ratio by 3.0 percentage points in 1H 2026, compared with a 1.9-point benefit a year earlier.
Workers’ compensation reserve releases remained a source of favorable development, alongside personal auto claims where severity was lower than insurers had anticipated.
The improvement in reserve experience reduced underwriting costs and supported operating results, adding to the financial benefit of lower catastrophe activity.
North American (re)insurers also strengthened their capital positions despite returning substantially more capital to shareholders. Common shareholders’ equity increased 4% during the first six months of 2026, supported by positive net earnings even as distributions to investors rose considerably.
