Despite the Southern California wildfires in early 2025, the insurance industry reported improved results compared with the previous year. Here are some key findings of these results reported by Verisk and the American Property Casualty Insurance Association.
Strong Underwriting Results:
- Net underwriting gain reached $35.3 billion, a significant increase from $4 billion in the same period in 2024.
- Combined ratio improved to 94% (down from 97.9%), marking the first sub-95 result in a decade—indicating stronger underwriting performance.
Premium and Surplus Growth:
- Net written premiums: Grew 5.1% to $740.7 billion.
- Net earned premiums: Increased 6.9% to $711.2 billion.
- Policyholders’ surplus: Rose to $1.20 trillion (up from $1.12 trillion in 2024).
Losses and Capital Gains:
- Incurred losses and loss adjustment expenses: Rose only 0.6% (compared to 2.7% in 2024).
- Realized capital gains: Fell to $15.6 billion (down from $75.5 billion in 2024). Adjusted for a one-time 2024 event, investment gains were stable.
Mid-Year 2025 Adjustments:
- First-half underwriting gain: Finalized at $11.6 billion (up from $3.8 billion in the prior year).
- Premiums written (first half): $489 billion (5.4% growth).
- Earned premiums (first half): $469 billion (7.4% growth).
- Mid-year policyholders’ surplus: $1.13 trillion (up from $1.07 trillion in 2024).
Contributing Factors:
- Reduced extreme weather losses and continued premium growth supported industry gains.
- Improved pricing and stable demand across most insurance lines.
About the Data:
- Based on filings from private U.S. property/casualty insurers (excluding certain state and federal programs).
- Covers approximately 97.9% of U.S. property/casualty business.
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