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US P&C underwriting nearly triples in 2026 first half, but casualty woes persist
Net underwriting income rose to $31.2 billion, while AM Best cited reserve deficiencies in commercial auto and ongoing pressure from liability claim severity.
The US property and casualty industry nearly tripled its net underwriting income in the first half of 2026, helped by a lower catastrophe-loss period. According to an AM Best report cited by Insurance Business, net underwriting income reached $31.2 billion for the six months ended June 30, up from $10.9 billion in the same period last year, and the industry combined ratio improved four points to 92.5.
Catastrophe losses accounted for 6.2 points of the combined ratio, down from 10.8 points in the first half of 2025 when the California wildfires hit. Insurance Business said AM Best warned the lighter catastrophe environment does not mean underlying loss trends have changed, and noted that APCIA senior vice president Robert Gordon said bodily injury and commercial liability losses continued to worsen.
AM Best maintains negative outlooks for commercial auto and general liability, and found commercial auto recorded another $2 billion in reserve deficiencies in 2025 linked largely to 2023 and 2024 accident years. The analysis also pointed to slowing premium growth, with net written premiums up 3% in the first half of 2026, and said some property savings could be absorbed by rising casualty costs instead.
Insurance Business also highlighted that the underwriting gain included offsets, with AM Best noting $6.2 billion in dividends to policyholders, predominantly $5 billion paid by State Farm, making the aggregate result partly influenced by one carrier’s decisions. With a 12% increase in net investment income alongside the underwriting gain, pre-tax operating income nearly doubled to $79.1 billion, and net income rose 55% to $77.8 billion.