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ALIRT flags diverging residual property insurance trends in four high-risk states
ALIRT says underwriting improved in 2025, with US homeowners insurance generating about $17 billion in profit, while California faces rising wildfire pressures and nearly 30% rate increases later this year.
ALIRT Insurance Research released its biannual report on residual property insurance markets in California, Florida, Louisiana, and Texas, finding widening differences across the four higher-risk states even as the broader US property insurance market has returned to profitability.
According to ALIRT, underwriting results improved significantly during 2025. Homeowners insurance generated approximately $17 billion in underwriting profit, its strongest annual performance in more than ten years, though conditions in states exposed to natural catastrophes are still moving along different paths.
To assess those state-level dynamics, ALIRT analyzed 15 years of data on premium growth, policy counts, net exposure, and profitability across FAIR Plans in the four states. California is identified as facing the most significant challenges, with escalating wildfire losses over the past decade, worsening after early 2025 Los Angeles wildfires led to substantial FAIR Plan claims.
ALIRT says California FAIR Plan participation had been rising rapidly before the 2025 wildfires and accelerated further afterward. It reports direct written premium approached $2 billion during the year, driving about a $1 billion assessment on admitted property insurers, and expects rates to rise by almost 30% later this year, alongside state reforms aimed at supporting the private market.