Best’s Market Segment Report: U.S. Property/Casualty Sector Notches Strongest Performance in a Decade

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)--
The U.S. property/casualty (P/C) industry capitalized on improved underwriting and pricing in 2025 to generate its best performance of the past decade, according to a new AM Best report.

The Best’s Special Report, titled “2025 P/C Snapshot: Strongest Performance in a Decade Showcases Resilience,” details the sector’s performance by line of business and notes $84 billion in underwriting gains during the past two full calendar years, following $51 billion in underwriting losses from 2021 through 2023. The turnaround in net underwriting performance started in 2024 with a $45 billion gain and continued in 2025, despite considerable losses in the early part of that year from the Los Angeles wildfires.

According to the report, the U.S. personal lines segment’s underwriting profit almost quadrupled to more than $45 billion in 2025, while the commercial lines segment’s profit more than doubled to over $19 billion. The turnaround during the past two years for private passenger auto insurers has been notable, with the lines combined ratio falling well below 100 in 2024 and 2025, after exceeding that threshold in the prior three years, reflecting unprofitable underwriting.

“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.”

U.S. commercial lines insurers in the aggregate have generated underwriting profits consistently over the five-year period detailed in this report, which is based on companies whose NAIC Insurance Expenses Exhibit financial statements were received, processed, and aggregated by AM Best as of June 2, 2026. The commercial lines results reflect the strong underwriting and operating performance, sustained pricing adequacy, improved investment returns and generally adequate reserves.

“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, AM Best. “Calendar-year underwriting performance varies widely across major commercial lines of business, but aggregate results remain favorable.”

Among the report’s other highlights:

For commercial liability lines, claim trends remain a central concern, driven by social inflation, aggressive litigation tactics, third‑party litigation funding, increasing settlement costs, and rising jury awards.
Adverse reserve development continues to plague commercial auto liability, with another $2.0 billion in reserve deficiencies in 2025, mostly on the reserves of the recent accident years, 2023 and 2024.

To access the full copy of this Best’s Special Report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=366399.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.