The US property/casualty insurance industry recorded its strongest underwriting result in ten years, according to AM Best data reported this week, with the two lines most households actually buy — homeowners and personal auto — driving the turnaround.
Industry underwriting income reached $61.2 billion in 2025, up from $23 billion the year before. The combined ratio, the standard measure of underwriting profitability, came in at 93 — a 3.6-point improvement on 2024 and the best figure in a decade. A combined ratio below 100 means an insurer is profitable on underwriting alone, before investment income.
Direct premiums written grew 5% to approximately $1.11 trillion.
Homeowners Swings From Loss to Profit
The homeowners line produced $16.8 billion in net underwriting income in 2025. That is a reversal from a roughly $1.5 billion underwriting loss in 2024, which itself followed a loss of nearly $16 billion in 2023.
The recovery came despite the early 2025 California wildfires. Net losses incurred fell 7.1% even after absorbing those claims, with rate increases filed in 2024 flowing through into earned premium during 2025.
Personal Auto More Than Doubles
Personal auto was the larger contributor in absolute terms, posting $28.9 billion in net underwriting income — more than double the $13.8 billion recorded in 2024.
David Blades, associate director at AM Best, attributed part of the improvement to operational change rather than pricing alone. Insurers writing both personal auto and homeowners “have reaped the benefits of technology and data analytics to supplement underwriting, claims handling, and ratemaking,” he said.
Not Every Line Recovered
The industry-wide figure conceals meaningful weakness in commercial lines:
- Commercial auto remained unprofitable, with a $1.9 billion underwriting loss. That is an improvement on the $4.9 billion loss in 2024, but the line continues to absorb reserve deficiencies of roughly $2 billion as liability losses mount.
- Other liability posted an underwriting loss of approximately $11 billion on a combined ratio of 114.7, pressured by social inflation and emerging litigation risk.
Commercial insurance overall still more than doubled its underwriting income to $19.2 billion.
What It Means for Households
A profitable year for insurers does not translate directly into lower premiums, and homeowners should not expect one. Rate filings reflect forward-looking loss expectations, reinsurance costs and catastrophe modelling rather than the prior year’s result.
What a decade-best year does change is market capacity. Profitability is what brings carriers back into states they had withdrawn from and loosens underwriting appetite — which shows up for consumers as more carriers willing to quote rather than as a smaller number on the renewal notice.
For homeowners in states that have seen carriers exit, that matters more than the headline. The practical step remains the same: reprice with several carriers at each renewal rather than accepting the renewal quote, because the spread between carriers on an identical home is routinely 30-50%.
Source: Insurance Journal, “US P/C Industry Books Best Result in a Decade, but Not All Lines Enjoy Success,” 27 July 2026, reporting AM Best data.
For how to act on your own renewal, see why home insurance premiums keep rising and why car insurance rates keep climbing.