Credit: ALM
U.S. property and casualty insurers saw a sharp increase in earnings last year, thanks to stronger underwriting results and an increase in investment income, according to a new report from Moody's.
Moody's analyzed a group of 20 property and casualty insurers and found they generated net income of $69 billion last year, up from $53.4 billion in 2024.
Better underwriting performance and slightly lower catastrophe losses helped boost profitability. The group had $19 billion in catastrophe losses in 2025 compared to $20.8 billion in 2024.
Investment income was also up. Insurers generated roughly $40 billion in net investment income, up 13% from 2024, as their portfolios continued to grow and maturing fixed income securities were reinvested at higher market yields.
The group increased its net premiums written by just over 5% to $411.6 billion in 2025, due largely to premium increases and higher policy counts for some personal lines insurers. Progressive alone comprised 40% of the group's premium growth.
The group's weighted average combined ratio was 88.4%, an improvement from 91.7% in 2024.
Moody's expects the industry to generate solid, but likely lower, returns in 2026. Rate increases are slowing, but the industry is well-capitalized, reinsurance buyers are benefiting from lower rates, and AI is expected to generate efficiencies and revenue growth going forward.
Photo credit: ALM
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