P&C Industry Posts Best Underwriting Results in a Decade

• By: Olivia Overman
• July 22, 2026

U.S. property & casualty insurers posted underwriting income of $61.2 billion in 2025, a significant improvement from $23 billion in 2024, according to a new report by AM Best. Additionally, the industry’s combined ratio finished at 93 in 2025—an improvement of 3.6 points over 2024. The 2025 results are the best posted in a decade.

The improvement in underwriting results is built upon the milestone achieved in 2024 when total direct premiums written (DPW) increased 5%, reaching approximately $1.1 trillion, according to the report.

“Insurers underwriting both personal auto and homeowners lines of coverage have reaped the benefits of technology and data analytics to supplement underwriting, claims handling and ratemaking,” said David Blades, associate director, AM Best. “For both lines, there was significant rate momentum coming into 2024 that flowed through net earned premium in both that year and 2025, aiding bottom-line results.”

The personal lines segment was the driver of the improved results. Net underwriting income in homeowners multiperil and private passenger auto in 2025 reached approximately $16.8 billion and $28.9 billion, respectively. Personal auto insurers benefited from a regulatory environment that allowed carriers to implement rate increases more quickly and frequently, the report said.

Homeowners multiperil and private passenger have a stable outlook from AM Best. Together, net underwriting income jumped to $5.8 billion in 2025 from $12.4 billion in 2024.

In commercial lines, insurers have more than doubled underwriting income to $19.2 billion in 2025. However, not all lines enjoyed positive results, with commercial auto and liability lines continuing to face negative results.

Commercial auto experienced a $1.9 billion loss, an improvement from the $4 billion loss in 2024. While physical damage remained profitable, liability losses, however, keep mounting, with insurers recording another $2 billion in reserve deficiencies in 2025, according to the report.

AM Best continues to hold a negative outlook for the commercial auto liability and other liability lines segments because of persistent pressure from rising claims severity, escalating legal expenses and the emergence of new forms of litigation.

Despite these challenges, however, commercial underwriting results improved, with the segment’s underwriting loss improving to approximately $11 billion in 2025 from approximately $13.7 billion in 2024. Additionally, net losses incurred climbed to nearly $50 billion, their highest level in five years, driven largely by litigation-related costs. The segments combined ratio improved to 114.7 in 2025, reflecting an improved performance from 120.3 result in 2024.

Workers compensation still positively contributes to aggregate commercial lines results. NPW rebounded in 2025 after declining in 2024. A combination of declining frequency, level severity and rising wages, contributed to a loss ratio of 48 and a 1.1% increase in net underwriting profit.

“Casualty lines, specifically commercial auto liability and other liability (occurrence) lines remain pressured by adverse development and elevated claims severity,” said Christopher Graham, senior industry analyst at AM Best. He added that calendar-year underwriting performance varies widely across major commercial lines, even as aggregate results remain favorable.

The Big “I” 2026 Market Share Report found that the independent insurance agency channel places 62% of all p&c insurance written in the U.S. This is an increase from 61.5% in 2024 and steady with the five-year average of 62%.

The independent agency channel maintained its share of commercial and personal lines. Independent agencies wrote 87.7% of commercial lines written premiums, consistent with 87.9% in 2024. Its share of personal lines continued to grow, at 39.5% in 2025 compared to 39.2% in 2024—continuing its trajectory from 36.7% in 2021.

Olivia Overman is IA content editor.