The U.S. property/casualty insurance sector wrapped up 2025 with its strongest financial performance in a decade, as sustained rate increases and sharper underwriting practices reversed years of losses, according to a new AM Best special report released July 13.
The report, titled “2025 P/C Snapshot: Strongest Performance in a Decade Showcases Resilience,” found that the industry generated $84 billion in combined underwriting gains across 2024 and 2025 — a dramatic reversal from the $51 billion in underwriting losses that piled up between 2021 and 2023.
Personal lines led the rebound. Underwriting profits in that segment nearly quadrupled to more than $45 billion in 2025, while commercial lines more than doubled to over $19 billion. For private passenger auto carriers in particular, the combined ratio dropped below 100 in both 2024 and 2025 after sitting above that threshold — the line marking unprofitable underwriting — for three consecutive years prior.
“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,” said David Blades, associate director at AM Best. He credited technology and data analytics with improving both claims handling and underwriting outcomes across personal auto and homeowners lines.
Commercial lines weren’t without complications. Casualty lines — particularly commercial auto liability and occurrence-based liability — continued to face pressure from adverse loss development and elevated claims severity. AM Best senior industry analyst Christopher Graham noted that while calendar-year results vary widely by business line, aggregate figures remain favorable.
Litigation trends are a persistent headache for commercial liability writers. Social inflation, third-party litigation funding, and rising jury awards continue pushing claim costs higher. Reserve deficiencies in commercial auto liability reached another $2.0 billion in 2025, largely concentrated in accident years 2023 and 2024.
Source: AM Best.
