Best’s Special Report: California Wildfires Send US Property/Casualty Segment to $1 Billion-Plus Underwriting Loss in First-Quarter 2025

OLDWICK, N.J.--(BUSINESS WIRE)--The U.S. property/casualty (P/C) industry recorded a $1.1 billion net underwriting loss in the first three months of 2025, down from a $9.4 billion gain recorded in the same prior-year period, driven largely by losses attributable to the January wildfires in California, according to a new AM Best report.

These preliminary results are detailed in a new Best’s Special Report, titled, “First Look: Three-Month 2025 US Property/Casualty Financial Results,” and the data is derived from companies’ annual statutory statements received as of May 29, 2025, representing an estimated 96% of the total P/C industry’s net premiums written. According to the report, catastrophe losses accounted for an estimated 14.7 percentage points on the property/casualty industry’s three-month 2025 combined ratio, up sharply from 5.4 points in the prior year’s first quarter. The combined ratio deteriorated to 99.4 from 94.4 in the first three months of 2023.

Despite a 2.4% increase in net investment income, pre-tax operating income dropped by 34.4% to $19.6 billion. A 74.6% reduction in net realized capital gains (driven primarily by a $10.5 billion decline at National Indemnity Company) contributed to the industry’s net income declining 50.4% from the prior year to $19.8 billion.

To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=354542.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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