With a combined ratio of 89.1 for third-quarter 2025, the U.S. property/casualty insurance industry had it
s best quarter in at least a quarter of a century—and maybe longer, S&P Market Intelligence said.
In a research report titled, “For U.S. P/C insurers, it just doesn’t get any better than this,” analysts Tim Zawacki and Husain Rupawala said the 89.1 combined ratio
was lower than any which the firm has on record for 98 quarters—dating b
ack to the start of 2001. The closest were a 90.7 recorded for third-quarter 2006 and 91.0 in first-quarter 2006.
The combination of a benign period of catastrophe losses and strong results in the auto and homeowners lines were key factors driving the result, the rep
ort said, also flagging a new low level for the industrywide loss adjustment ratio.
Looking forward, they said that “slowing top-line growth, mixed ma
croeconomic prospects and the inevitability” that the higher levels of ca
tastrophe losses will return “create the potential that the third quarter’s result will stand for the foreseeable future as the best on record.”
While S&P GMI analysts derived most of the industry results in the report by aggregating individual company statutory reports filed with the National Asso
ciation of Insurance Commissioners (as of Nov. 19 for third-quarter 2025 and previously published aggregations for prior periods), they also tapped into public compan
See more beautiful photo albums Here >>>
y historical results and analyst estimates to offer insights about catastrophe loss impacts on loss ratios.
Citing this public company information from Visible Alpha, a part of S&P GMI, the report said that while the th
ird quarter of any year is typically the heaviest for catastrophe losses, Visible Alpha shows the third-quarter 2025 cat impac
t of 1.7 points compares to 7.9 points for third-quarter 2024, and a m
edian of 6.9 points across the third quarters in the seven years extending from 2021-2027 (2026 and 2027 are analysts’ estimates).
The lack of landfalling hurricanes, however, wasn’t the only factor impacting underwriting results, the rep
ort said. Focusing on statutory results, S&P GMI reports that an LAE ratio, tracking costs incurred for defense, settlement and claims adjustment. was less than 8.8 poi
nts in third-quarter 2025—a new low for the industry.
Putting the pure loss ratio and LAE ratio together, the loss and LAE ratio was 63.3, S&P GMI said, noting that the lo
ss ratio component by itself (54.6) was not a record. The industry
achieved lower pure loss ratios in the aftermath of Hurricane Katrina in 2006 and 2007, according to S&P GMI.
The third-quarter 2025 loss and LAE ratio was exactly the same as in third-quarter 2024, based on S&P GMI’s calculations.
Individually, seven large U.S. P/C groups each generated net under
writing gains in excess of $1 billion in the third quarter of 2025, while only one U.S. P/C group, Everest Group, produced a net underwriting loss in excess of $100 million.