The US property and casualty insurance industry delivered a $34.9 bn net underwriting gain for the 9 months of 2025, a sharp turn from the $3.7 bn gain recorded in the same stretch last year, according to AM Best. Results firmed quickly as pricing held and weather cooperated.
Net premiums earned rose 7%, and underwriting benefited from relatively light catastrophe activity in the third quarter.
Incurred losses and loss adjustment expenses for the nine-month period tracked close to prior-year levels, even with higher premium volume moving through the system. Lower catastrophe pressure smoothed margins. That mattered.
The industry combined ratio improved to 94 for the first nine months of 2025. AM Best estimated catastrophe losses added 8.0 points to the ratio, down from about 8.7 points a year earlier. Fewer large events translated into less noise across quarterly results.
The numbers line up with broader growth forecasts. The Insurance Information Institute and Milliman expect the US P&C sector to expand faster than the wider economy in 2025.
Their outlook pegs US GDP growth at 1.6% versus underlying P&C growth of 2.4%. Insurance still outpaces macro. Barely, but consistently.
Strip out $18 bn of favorable reserve development booked in the first three quarters and the accident-year combined ratio lands at 96.5.
AM Best said that shows calendar-year profitability leaned on reserve releases, though current-year underwriting still sat in the black on an accident basis.
According to Beinsure analysts, that distinction matters more now than it did a few years ago.
Investment results added another layer. Earned net investment income increased 5.9%. Combined with underwriting gains, pretax operating income jumped 51.9% to $102.4 bn. Strong. Then markets stepped in.
Net realized capital gains fell 80%. The drop traced largely to a combined $60.5 bn decline at three Berkshire Hathaway companies, which dragged on reported results. Capital markets giveth. Then they don’t.
That swing pushed industry net income down 23.3% to $100.9 bn for the nine-month period.
AM Best’s breakdown points to stronger core operations, even as headline profitability bent under market-driven valuation changes. Capital stayed healthy. Volatility didn’t disappear. The industry took the trade anyway.
Catastrophe experience still shaped outcomes by line. Triple-I said better homeowners results in the second quarter narrowed the gap between personal and commercial lines after heavy fire losses in Los Angeles earlier in 2025. One quarter helped undo another. That’s how this business runs.
Policyholder surplus rose 6.8% from year-end 2024 to $1.2 tn. The increase reflected $131.3 bn from net income, unrealized gain movements, and contributed capital.
Offsetting that, $20.5 bn flowed out through other surplus losses and shareholder dividends.
