The US property and casualty insurance industry recorded an estimated net underwriting gain of $31.7 bn in the first half of 2026, according to Verisk and the American Property Casualty Insurance Association. That compares with $11.6 bn in the same period of 2025, when results were affected by catastrophe losses from the Los Angeles wildfires.
The industry’s combined ratio improved to 92.7 from 96.5 at midyear 2025. Verisk and APCIA described the result as one of the strongest half-year underwriting performances in recent history.
Incurred losses and loss adjustment expenses fell 4.8% during the first six months of 2026. A year earlier, the same measure had increased 5.1%.
Premium growth moved in the opposite direction as pricing conditions became more competitive. Net written premiums increased 2.1%, compared with 5.2% in the first half of 2025 and 10.8% in the first half of 2024. Net earned premiums rose 3.3% during the period. Growth had reached 7.3% in the first six months of 2025.
Aon says global property and casualty insurers are entering the next phase of the market cycle with stronger earnings and capital positions. Its latest analysis argues that recent profitability gives carriers more room to invest in underwriting, technology and portfolio decisions as market conditions become less uniform.
Return on average equity reached 16.8% in 2025, the highest level Aon has recorded since tracking the cohort began in 2009.
RoAE improved for a fifth consecutive year following the 2020 downturn, supported by stronger underwriting income, favorable market conditions and a relatively mild catastrophe year.
Robert Gordon, senior vice president of policy, research and international at APCIA, said premium increases continued to moderate during the first half. He said growth fell below general inflation as well as increases in building material and labor costs.
Property insurance pricing softened across much of the market. Casualty remained under greater pressure, although the report noted early signs that conditions in the hard casualty market are beginning to ease.
Saurabh Khemka, president of Verisk Underwriting Solutions, said stronger industry results don’t mean underlying exposures have declined. He said insurers face a more segmented property market as pricing becomes increasingly competitive.
The report also pointed to continued affordability pressure for homeowners and businesses. Higher construction expenses and claim severity continue to affect rebuilding costs and the amount required to settle losses.
Policyholders’ surplus increased to $1.3 tn in the first half of 2026 from $1.13 tn at midyear 2025. The higher capital base gives the industry more financial capacity to absorb future losses.
Catastrophe exposure nevertheless remains substantial. Verisk’s 2026 Global Modeled Catastrophe Losses Report estimates average annual insured catastrophe losses worldwide at about $171 bn.
The US represents approximately $117 bn of that amount, or about two-thirds of the global total. Verisk said severe convective storms and wildfires remain capable of producing substantial losses even without a major hurricane event.
Investment results also improved during the first half. Net investment gains reached $59.6 bn, compared with $49.0 bn during the same period of 2025.
Net income after taxes increased 53% to $77.8 bn from $50.9 bn. The rise reflected stronger underwriting results together with higher investment gains.
Performance varied substantially between states and insurance lines. Gordon said policyholders in Florida, Georgia and Louisiana have begun seeing lower auto and homeowners rates following legal system reforms enacted in those states.
APCIA expects those reductions to produce hundreds of millions of dollars in premium relief. The organization attributes part of the improvement to changes intended to reduce litigation-related insurance costs.
Casualty claims remain a more difficult area despite lower catastrophe losses. Gordon said bodily injury and commercial liability loss trends continued to deteriorate during the first half.
Excess liability and umbrella coverage were among the lines facing continued pressure. Commercial auto and other casualty classes also experienced higher claim severity, large jury awards and rising medical costs.
The first-half results therefore show stronger overall P&C profitability alongside slower premium growth. Property conditions continued to soften, while casualty loss severity and US catastrophe exposure remained major sources of underwriting pressure.
