Verisk data shows that the financial performance of the U.S. property and casualty (P&C) insurance industry improved year-on-year in the first quarter of 2026, with the combined ratio of insurers at 92.4, but premium growth slowed significantly.
The industry expects net underwriting earnings of approximately $15.8 billion in the first quarter of 2026, according to key financial indicators for U.S. private property insurers from Verisk and the American Property Casualty Insurance Association (APCIA).
This is a strong rebound from underwriting losses of $864 million in the first quarter of 2025, which were significantly impacted by large-scale disaster activity such as the Palisades and Eaton wildfires.
The industry’s overall health is reflected in a strong combined ratio of 92.4%, down from 99.2% in the year-ago period.
This dramatic shift from loss to profit reflects the volatility seen in recent years, such as a jump from a loss of $7.8 billion in the first quarter of 2023 to a gain of $9.5 billion in the first quarter of 2024.
First-quarter results were primarily driven by continued momentum in personal auto underwriting and more consistent catastrophe experience compared to the prior year.
Unlike previous car rate hikes, some insurance companies are choosing to refund personal car premiums through increased policyholder dividends. Meanwhile, other insurance businesses remain under pressure amid varying broader market conditions.
Robert Gordon, senior vice president of policy, research and international at APCIA, said: “Industry profitability improved in 2025 and the first quarter of 2026, driven primarily by benign inflation and the exceptional easing of natural disasters over the past 12 months. The good news for policyholders is that premium growth continues to slow.
“Net written premium growth slowed sharply to 2.9% in the first quarter of 2026, down from 9.6% in the first quarter of 2024 and 6.8% in the first quarter of 2025. Taking into account inflation and the return of $6.2 billion to policyholders through dividends, written premiums actually declined in 2026.”
Adding: “Net profits rebounded in the first quarter of 2026, following a 50% decline in the first quarter of 2025. At the same time, legal abuse and rising claim severity remain among the industry’s most significant headwinds. States such as Florida have enacted meaningful legal abuse reforms and are starting to see progress, including stabilization and reductions in auto and homeowners insurance rates.”
Underwriting industry financial results for the first quarter of 2026 also included a 3.6% increase in net premiums earned, compared with a 7.8% increase in the same period in 2025. Incurred losses and loss adjustment expenses decreased 9.6% compared with a 15.5% increase in the first quarter of 2025.
Policyholder surplus increased to $1.24 trillion from $1.09 trillion in the same period in 2025. Realized capital gains increased to $8.8 billion, compared with $3.7 billion in the first quarter of 2025, and net income after tax increased to $40.9 billion from $19.4 billion in the same period last year.
