The nonstandard auto insurance market in 2025 certainly looks to be mainta
ining the momentum it gained last year, according to a new report from AM Best.
The insurance industry rating agency said U.S. private passenger nonstandard auto insurers turned in und
erwriting profit of $65.2 for the first half of 2025, compared with $16.6 million during the same period a year ago.
In its Market Segment Report, AM Best said rate adequacy and levera
ging technology for underwriting, claims, and distribution purposes were the drivers of profit improvement.
Nonstandard auto writers posted a H1 2025 combined ratio of 96.6 compared with a H1 2024 combined ratio of 98.
“The improved combined and loss ratios suggest insurers have raised premiums enough to better offset claim costs,
” said David Blades, associate director, Industry Research and Analytics, AM
Best. “In the short term, more modest price increases could still be warranted to sufficiently offset auto physical dama
ge claim costs to replace auto parts and technology in addition
to liability costs associated with increased attorney involvement in claims and uncertainty surrounding tariffs.”
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The magnitude of premium increases may have peaked in 2024, with hikes of 27.6% and 24.9% in the first and sec
ond quarters compared to premium increases of 10.5% and 3.8% during the same quarters in 2025.\
There are several factors that influenced the tame season, including a weaker Bermuda High farther east, dips in the jet st
ream over the eastern half of the nation, a rare interaction between two hurricanes, dry air and disruptive wind shear,
which helped prevent hurricanes from making landfall along the Atlantic or Gulf coasts this year, according to AccuWeather.
That lack of activity was good for homeowners and people in the paths of the devastating storms, but it also meant no mass deployments of adjust
ers, no surge in hiring, and as a result, it led to no catastrophe experience for new adjusters.
Geoffrey Conrad, who has been in claims for more than 20 years,
much of that time training insurance adjusters, was already worried about a lack of quality experience for claims professionals, a field that has also seen artificial
intelligence and streamlining driving down pay—and apparently qualifications—for entry level claims jobs.