Underwriting metrics and profits
A social thread reminded investors that the Combined Ratio (target under 100%) is central to underwriting strength, while recent posts highlighted large 2025 P&C profits—State Farm reported $12.9B and the industry showed roughly $60.9B in net income, a year‑over‑year jump noted in commentary. Those figures were presented as context for evaluating insurer operational performance. (x.com, x.com)
Property and casualty insurers judge their core business with one number: the combined ratio. If it stays below 100, premiums covered claims and operating costs before investment income enters the picture. (naic.org, irmi.com) The ratio adds two pieces together: losses and loss-adjustment expenses as a share of earned premium, plus underwriting expenses as a share of premium. A lower number means the insurer kept more of each premium dollar after paying claims and running the business. (irmi.com) That is why investors separate underwriting from total profit. An insurer can post overall net income from investment returns even when its combined ratio is above 100 and underwriting itself lost money. (irmi.com, naic.org) In 2025, the United States property and casualty industry recorded a $60.9 billion net underwriting gain, up from $22.1 billion in 2024, according to AM Best. AM Best said the industry’s combined ratio improved 3.7 points to 92.2. (ambest.com) AM Best said catastrophe losses accounted for 7.6 points on the 2025 combined ratio, down from 8.8 points in 2024. The report also said net earned premiums rose 6% while incurred losses and loss-adjustment expenses declined. (ambest.com) The same AM Best report said pre-tax operating income rose 43% to $153.1 billion in 2025. But net income fell nearly 10% to $150.9 billion after a 72% drop in realized capital gains, driven mainly by a $60.0 billion decline at three Berkshire Hathaway companies. (ambest.com) State Farm reported strong 2025 property and casualty results on February 26, 2026. Its property and casualty affiliates posted $111.6 billion in earned premium and a $1.5 billion combined underwriting gain. (statefarm.com) State Farm said that underwriting gain, together with $7.0 billion of investment and other income, produced an $8.5 billion property and casualty pre-tax operating profit in 2025. The company also said it incurred $78 billion in claims, including nearly $15 billion tied to catastrophe claims during the year. (statefarm.com) The National Association of Insurance Commissioners’ mid-year 2025 industry report showed the sector already running at a 96.4 combined ratio through June 30, 2025, with a $13.7 billion underwriting gain. The same report said policyholders’ surplus reached $1.1 trillion at midyear. (naic.org) For investors, the split is straightforward: combined ratio measures whether underwriting worked, while net income also reflects what happened in the investment portfolio. In 2025, both State Farm’s underwriting gain and the industry’s sharper drop in combined ratio pointed to stronger insurance operations, not just better markets. (statefarm.com, ambest.com, irmi.com)
