U.S. property/casualty mutual insurers double net income as underwriting swings to $14.8 billion gain

U.S. property/casualty mutual insurers earned about $42.6 billion in 2025, double the prior year, as underwriting flipped from a $7.2 billion loss to roughly $14.8 billion of income, according to an AM Best segment report covered by Carrier Management. The group, which AM Best defines to include reciprocal exchanges and insurance cooperatives, improved its combined ratio to 95.2 from 101.2 in 2024 and 110.4 in 2023, against a five-year average of 104.

The gain was made on the underwriting side. Loss and loss adjustment expenses fell 2% even as underwriting expenses rose 5.8%, and AM Best analyst Justin Aimone attributes the result to rate increases, restructured discounts and higher deductibles that mutuals began filing in the years before 2025, supported by better data analytics, technology and risk modeling. Put another way, 2025 collected on filings made when pricing was worse.

Secondary perils drove the filings, as convective storms, wildfires and flooding had been climbing in frequency and severity and the underwriting adjustments were fully embedded in 2025 policies. A benign hurricane season meant no large-scale storm loss to offset them, though AM Best notes the year still produced 23 events with economic losses of at least $1 billion and ranked third-highest for billion-dollar weather disasters. Premiums caught up to the cost of claims.

For the general account, the interesting number is the one that stopped running. Net premiums written rose about 5%, to $364.1 billion, which AM Best calls a return to the pre-pandemic average — ordinary growth rather than a surge, and slower than the repricing that produced the profit. Premium growth is the new-money pipeline, and higher reinvestment yields are arriving on slower new-money growth.

Earlier this month, covering BCG's call for underwriting discipline, we noted that the sector's returns now rest more on the fixed-income book than on the risk underwritten. The $22 billion swing from loss to gain in a single year tests that view: the underwriting half can still swing the income statement harder and faster than any allocation decision — the portfolio sets the baseline, the storm season sets the variance.

The capital story is concentrated: AM Best notes the top 25 mutuals write more than 83% of the segment's net premiums, so the stronger balance sheets built in 2025 sit on a short list of names. The report says nothing about how those names will invest the difference, and it does not have to: the question general-account officers face is whether a storm-free year is a durable addition to surplus or a one-season windfall, and the 2026 hurricane season will answer most of it.