Total net income for U.S. property/casualty mutual insurers doubled compared to 2024 to about $42.6 billion in 2025 as underwriting income surged to about $14.8 billion from a loss of $7.2 billion in 2024.
According to a recent A.M. Best report on the segment, the rise in net income was also driven by a modest 2% decline in loss and loss adjustment expenses despite underwriting expenses increasing 5.8% in 2025 compared to the year prior.
“Mutuals began filing for significant rate increases, restructuring discounts and raising deductibles in years preceding 2025, and the effects of these underwriting actions have bolstered revenue,” said Justin Aimone, financia
l analyst, AM Best. “Rate adequacy and mutual carriers’ ability to properly price risks also have benefited significantly from the rise of data analytics, enhanced technology and risk modeling.”
The segment includes reciprocal exchanges and insurance cooperatives, the industry rating agency said.
Mutuals started asking for more rate to combat increases in the frequency and severity of secondary perils such as convective storms, wildfires, and flo
oding. In 2025 there were 23 events with economic losses of at least $1 billion. The underwriting adjustments were fully integrated into policies in 2025 and, without a large-scale hurricane loss thanks to a rather benign 2025 season, insur
ers improved financial results. However, even without hurricane
losses, 2025 ranked as the third highest for billion-dollar weather disasters.
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AM Best said results suggest premiums caught up to the cost of claims. Rate increases and premium growth slowed in 2025, with net premiums written up about 5% – a return to the pre-pandemic average – to $364.1 billion.
The 2025 combined ratio for the segment improved to 95.2 compared with 101.2 in 2024 and 110.4 in 2023. The average over the last 5 years is 104.
The list of top mutual insurers typically does not move much from year to year and that was the same in 2025, with the top 25 accounting for more than 83% of total NPW from mutuals.
Although prior case law implied that New York permits bad faith claims in the third-party liability context, the Southern District of New York recently made that
rule explicit in Renergy, Inc. v. Mt. Hawley Ins. Co., No. 25-CV-5073, 2026 WL 1192415 (S.D.N.Y. May 1, 2026). Following this decision, policyholders may pursue bad faith claims and seek consequential damages for bad faith claims
handling of third-party coverage claims. The decision reinforces insurance companies’ accountability and confirms that claims for such damages are valid under New York law.
