AM Best: US P/C Industry Records $1.1B Underwriting Loss for Q1

Growth in net earned premiums during the first three months of 2025 was offset by losses and expenses, resulting in a $1.1 billion net underwriting loss of the U.S. P/C industry.

According to industry rating agency AM Best, the January wildfires in California were to blame for the increase in losses for personal and commercial insurance lines in the first quarter.

Editors Note: Updated June 10 to add commentary from Fitch Ratings.

Fitch Ratings in said insured losses during the first quarter were an estimated $50 billion, with $38 billion from the California wildfires. The total is $19 billion more than Q1 2024.

Losses incurred during Q1 were about $147.1 billion, up about 17% from the same period a year ago. Losses and loss adjustment expenses (LAE) were up 15.8% to about $167.5 billion, which significantly offset a 7.8% increase in net premiums earned to $226.3 billion, said AM Best in a first look at industry financial results.

Q1 net investment income of $20.5 billion was up just 2.4% from Q1 2024.

Net income dropped more than 50% to about $19.8 billion during Q1 2025.

The industry’s combined ratio worsened to 99.4 from 94.4 during Q1 2024. Excluding $9.6 billion of favorable reserve development during Q1, the combined ratio was 103.6, said AM Best.

Fitch said the industry reported net income of $20.1 billion and a combined ratio of 98.8 for Q1 2025.

AM Best the first quarter analysis was based on company reports received by May 29. These insurers represent about 96% of both the industry’s total net premiums written and industry surplus, which increased 6.9% to about $1.1 billion.

Topics USA Profit Loss Underwriting AM Best Market Property Casualty