Reduced catastrophe losses helped the US property-and-casualty insurance industry to nearly triple its underwriting profits in 2025, according to analysis by AM Best.

The ratings agency said industry posted a $60.9 billion net underwriting gain last year, up from a $22.1 billion gain recorded in the prior year.

According to the report, the P&C industry’s combined ratio — a measure of underwriting profitability — improved significantly by 3.7 percentage points to 92.2 in 2025.

Catastrophe losses accounted for an estimated 7.6 points on the 2025 combined ratio, down from an estimated 8.8 points in 2024.

The improved underwriting results reflected a 6.1 per cent increase in net earned premiums while incurred losses and loss adjustment expenses declined, partly because of muted catastrophe losses during 2025.

The P&C industry also saw a 9 per cent increase in net investment income in 2025, which along with the underwriting gain, boosted pre-tax operating income by 43 per cent, to $153.1 billion.

A 72 per cent reduction in net realised capital gains (driven primarily by a combined $60 billion decline at three Berkshire Hathaway companies) in 2025 contributed to the industry’s net income declining nearly 10 per cent from the prior year to $150.9 billion.

AM Best said industry surplus increased 11.4 per cent from the end of 2024, to $1.2 trillion, as a combined $199.2 billion of net income, change in unrealised gains and contributed capital was reduced by $76.3 billion of other surplus losses and stockholder dividends.