Watchdog nonprofit finds P&C insurers had most profitable underwriting year in decades

A recently released analysis from Public Citizen finds that 2025 was the most profitable underwriting year in more than two decades for the property and casualty (P&C) insurance industry. 

Public Citizen, a consumer watchdog nonprofit, analyzed data released by the National Association of Insurance Commissioners (NAIC) earlier this month. 

P&C insurance companies made $68.7 billion in underwriting income, or income collected in premiums above what they pay out in claims and operating costs, a release about the report states. That increased $25.3 billion from 2024 and about $90 billion over the past two years. 

The industry also gained $111.6 billion in investment income, the release states. That’s down from the past two years but double what it gained in 2016. 

Surplus income for the insurers hit an all-time high of $1.27 trillion, the release adds. 

The combined ratio for 2025 was 92.9%, meaning insurers kept about $7 of every $100 in premiums as underwriting profit, the analysis found. 

“That’s one of the highest results the industry has seen in years,” the release states. 

The release adds that the loss ratio dropped to 66.5%, which means insurers paid outlets relative to the premiums they collected than in previous years. 

“At the same time, insurers did not reduce their operating costs,” the release states. “Total underwriting expenses rose to $252.2 billion, growing faster than premiums themselves. In other words, the industry didn’t make more money because it became more efficient or cut overhead. Instead, insurers charged higher premiums while paying less in claims.”

Net premiums increased by $976.8 billion for the P&C industry in 2025, rising 4.6%, the release states. This is slightly slower growth than the 8% to 10% annual gains seen in previous years. 

Last year’s results are partly due to weather events, with no significant hurricanes making landfall. It notes that the exception was the Palisades and Eaton Fires in Los Angeles. 

The increase in profit also comes following years of rate hikes. 

“The result is a transfer of money from policyholders to shareholders and executives who are now sitting on record capital and record profits,” the release states. “Last year, the property and casualty insurance industry’s return on surplus — the standard measure of how much profit insurers generate on their capital base — was 12.6%, following an even higher 15.2% return in 2024.”

For most of the past decade, insurers generated single-digit returns, according to the release. 

“Policyholders’ surplus, or the financial cushion insurers hold, is often used to justify arguments that higher premiums are needed to keep them financially stable,” the release states. “It also hit an all-time high of $1.27 trillion last year. That’s up 27% from 2022, when the industry was pleading poverty to regulators.”

CEO pay also increased last year, with Chubb CEO Evan Greenberg making $33 million, up $3 million from 2024. Allstate CEO Tom Wilson earned more than $45 million. 

“For years, insurers have paid executives top-tier compensation while raising premiums under the guise of financial need,” the release states. “CEOs at the ten largest insurers collectively took home more than $134 million in 2024, a 27% increase in salary and bonuses from the year before.”

Michael Tipsord, State Farm’s outgoing CEO, earned the highest cash compensation ($24.4 million) among personal lines executives in 2022. The release adds that State Farm warned regulators it needed large rate increases to survive. 

It adds that California is the only state that prohibits expensing executive compensation when filing for rate increases.

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