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U.S. homeowners insurers post $16.5B underwriting profit in 2025
AM Best attributed the turnaround to better pricing and catastrophe risk management, plus a relatively benign catastrophe year in 2025.
U.S. homeowners insurance shifted to profitability in 2025, with the segment posting a $16.5 billion underwriting gain, reversing course after avoiding an annual loss for the first time in six years, according to an AM Best market segment report summarized by Insurance Business.
AM Best said the turnaround was driven by enhanced pricing sophistication, improved catastrophe risk management, and more consistent use of disciplined underwriting guidelines, supported by a relatively benign catastrophe year in 2025.
In remarks carried by Insurance Business, AM Best associate director David Blades said insurers have changed how they assess rate adequacy, with a greater focus on matching rates to risk using more recent loss trends.
The report also pointed to double digit growth in both direct and net premiums written from 2022 through 2024, which helped build a stronger premium base when combined with calmer catastrophe conditions in 2025.