U.S. p/c posts best Q1 underwriting

U.S. property/casualty insurers opened 2026 with their strongest quarterly underwriting result in a quarter-century, according to an S&P Global Market Intelligence report published by Insurance Journal on May 22. The industry posted a combined ratio of 89.5 before policyholder dividends in the first quarter, the best quarterly figure in 25 years. (insurancejournal.com) The result reflected stronger pricing and lower loss activity, extending a profitability rebound that had already taken hold in 2024 and 2025. For insurance buyers, the number matters because underwriting profitability is the industry’s core operating measure. A combined ratio below 100 means carriers collected more in premium than they paid out in claims and expenses. (insurancejournal.com) At 89.5, the first-quarter result signaled unusually wide underwriting margins by recent standards. ### Why is 89.5 such a notable number? The 89.5 figure was the best quarterly underwriting performance since the late 1990s, according to the May 22 Insurance Journal report citing S&P Global Market Intelligence. That compares with a 94 net combined ratio in the first quarter of 2024, which Fitch Ratings said at the time was the best since first-quarter 2007. (insurancejournal.com) The latest result therefore improved on what had already been considered a standout quarter a year earlier. State Farm also affected the quarter’s optics. The insurer’s dividend was recorded in first-quarter 2026, pushing the industrywide policyholder dividend ratio to nearly 2.4, the second-highest ratio in 25 years, the report said. (insurancejournal.com) That means the headline underwriting result before dividends was stronger than the after-dividend view would suggest. ### What drove the improvement? Pricing remained the central driver. AM Best said in a March market segment report that U.S. property/casualty insurers carried sustained momentum on pricing and investment income across key lines, and it estimated net underwriting income would more than double in 2025 even after California wildfire losses. (insurancejournal.com) The same report said pricing trends had stabilized or softened in most major lines, a sign that 2026 may not repeat the same margin expansion. Loss experience also helped. Verisk and the American Property Casualty Insurance Association said in March that 2025 underwriting gains were supported in part by unusually low catastrophe losses rather than a fundamental shift in underlying risk, according to Insurance Journal. (insurancejournal.com) That context suggests the first-quarter 2026 result came after an already favorable prior year. ### How does this fit with the industry’s broader rebound? AM Best said in March that the U.S. property/casualty industry recorded a $60.9 billion net underwriting gain in 2025, nearly triple the prior year’s $22.1 billion. AM Best had also reported that 2024 marked the industry’s first underwriting profit since 2020. (news.ambest.com) Those annual results set the stage for the first-quarter 2026 record. The improvement was not uniform across every risk. AM Best said earlier this year that lower expenses and better rate adequacy had helped the sector, but it also warned that weather volatility, reinsurance conditions and softer pricing could pressure results in 2026. Fitch similarly said in December 2025 that full-year 2026 results were likely to look more like 2024 than the stronger 2025 outcome. (insurancejournal.com) ### What should readers watch next? AM Best said its 2026 outlook could worsen if a severe catastrophe hits later in the year. Hurricane season, midyear reserve development and second-quarter statutory filings will show whether first-quarter margins hold as weather losses normalize and pricing eases. (news.ambest.com 1) (news.ambest.com 2) (news.ambest.com 3)